Redbubble kickstarts FY24 with a return to positive cashflow
Independent artist promoter Redbubble (ASX: RBL) has announced a return to positive underlying cashflow for the first quarter of the 2024 financial year.
The company reported a cashflow of $700,000 to end September, which was up $16.9 million on the same time last year and $5.5 million on the June quarter.
Its cash balance hit $39.9 million for the period — up $4.2 million on June’s result.
A gross profit after paid acquisition (GPAPA) of $26.5 million (14% higher than the previous corresponding period) and associated margin of 28% followed recent initiatives including the introduction of artist account tiers on the Redbubble and TeePublic marketplaces and a dynamic order routing system for the company’s US customer base.
Marketplace revenue (MPR) experienced an anticipated 6% decline on the previous period, reflecting the group’s focus on maximising its GPAPA as well as softer trading conditions in the US.
The September quarter delivered the benefit of cost saving measures implemented during 2023 financial year, with operating expenses curtailed by 32% on the previous period to sit at $23.3 million.
A good start
Redbubble chief executive officer Martin Hosking said the group had reported a good start to the new financial year.
“Our ongoing focus on a narrow set of priorities continues to drive margin expansion and absolute GPAPA growth… these improvements combined with our cost discipline has enabled us to achieve positive underlying cashflow this quarter, which is a particularly strong feat as the first quarter is a seasonally-low revenue period,” he said.
“Both our marketplaces delivered GPAPA and cashflow growth, which was my initial objective after being appointed to this role in March and was necessary to stabilise the business… I am now shifting the focus to reinstating profitable revenue growth and am confident that we have the right team and resources in place to achieve this goal.”
Mr Hosking expected trading conditions to remain soft in key markets, particularly the US, in the near term.
“In this environment, we will remain focused on optimising the cost of goods sold, and working on our promotions and paid marketing activities to maximise GPAPA,” he said.