engage:BDR delivers turnaround result in fiscal 2019
engage:BDR (ASX:EN1 and EN1O) released its audited financial results for the 12 months to 31 December, 1019 on Monday morning.
For the best part, these had been flagged in late February when management released the company’s unaudited results commentary.
Key takeaways that have not varied included a 50% increase in revenues to $17.1 million and an operating profit of $1.6 million, assisted by a strong improvement in gross margins which were up from 38% in the previous corresponding period to 54%.
In a year of transformation and restructuring, the company had a number of non-cash one-off expenses which are outlined below.
From an operational perspective, it is important to focus on the group’s ability to meet predetermined milestones during 2019.
On 11 February, 2019, EN1 announced the Strategic Plan to Profitability with Key Milestones for 2019.
Within this plan, EN1 committed to achieving specific milestones within certain timeframes, with the ultimate goal of achieving profitability.
All milestones were achieved on or before schedule in 2019, as well as delivering on some other initiatives which were announced later in the year.
This was achieved while still delivering a strong underlying profit.
Central to achieving these goals was a significant reduction in costs, and importantly, management believes this new cost base is sustainable.
Looking to the future
Having delivered such a strong performance, all eyes now turn to 2020, and based on management’s commentary the company is well positioned to build on its achievements in 2019.
On this note, the company is of the view that it has never been positioned better for exponential revenue, profitability and market share growth.
Management noted that EN1 has a healthy balance sheet, is profitable, has scaling revenue and margins and has access to significant capital.
More importantly, it is of the view that EN1 has the partnership integrations which differentiate the company from many US peers.
Management expects revenue, gross margins, EBITDA and NPAT to continue to increase in 2020 as a result of the company’s client and partnership mix.
Strong first-quarter provides platform for growth
More specifically, executive chairman and chief executive Ted Dhanik said, “2019 was a pivotal year for EN1.
‘’At the beginning of the year, we set out to move a mountain with just a strong plan...I believe we moved several mountains by believing in that strategy and consistently executing on that plan.
‘’We grew revenues 50%, grew gross margins 42%, achieved profitability and consistently signed key customers and new partnerships, previously unattainable.
‘’We now have a blank slate, we are positioned well with a strong balance sheet, key and unique partnerships and most importantly, the winning team.
‘’We have a head start on 2020 with about three times the revenue we had this time last year, and we are focused on keeping that momentum growing.
‘’I’m looking forward to enjoying greater wins with you in 2020.”