RooLife Group (ASX: RLG) has generated its first revenue from selling Merino & Co wool garments into China using its e-commerce and digital marketing technology.
The company has received first cash from more than $310,000-worth of sales of the Merino & Co products during February.
As a result, RooLife anticipates the sales of the Merino & Co wool products will contribute to strong growth in the March 2022 quarter.
RooLife has attributed the high Merino & Co cash receipts to its partnership with China-focused sales channel and strategic investor China Cross Border Trading Group (CCTG), which was announced in December 2021.
CCTG purchased $1 million RooLife shares in mid-December, and agreed to market, sell and introduce RooLife’s products to new sales and retail channels in China.
Although RooLife does not consider the initial cash receipts from the Marino & Co sales material, it says it is “particularly pleased” with the sales growth achieved in the current March quarter.
Sales for the period are expected to increase between 25-30% on December 2021 quarter levels.
Strong December half year result
The sales momentum for the March quarter follows a strong December half year result (H1 FY2022).
Revenue from ordinary activities rocketed 304% to $8.1 million compared to $2 million in H1 FY2021. Total cash receipts rose from $1.66 million in H1 FY2021 to $5.65 million in H1 FY2022.
The higher revenue resulted in a 41% reduced loss for the period of $865,305.
RooLife closed out H1 FY2022 with a 33% increase to its net assets of $7.6 million.
RooLife’s technology and services platforms manage the sale of food, beverages and health and well-being products into growth markets with a focus on China.
During H1 FY2022, RooLife’s fresh food store was launched on Pinduoduo, and achieved top 10 status for sales in its category in China within three months.
With more than 850 million active users, Pinduoduo is China’s largest online shopping platform.