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Global expansion results in Cycliq delivering record sales in September quarter
2 minute read
Shares in Cycliq Group (ASX:CYQ) rallied more than 10 per cent in mid-morning trading after the company provided a positive update on its September quarter trading.
Total unit sales were up 52 per cent on a quarter on quarter basis with revenues of more than $850,000 representing an increase of 28 per cent on the previous quarter.
The increase in gross margins to a record high of 39.4 per cent in the September quarter compared with the average of 22.6 per cent in fiscal 2007 indicates that CYQ is benefiting from the efficiencies of changes made to its distribution model over the last 12 months.
On this note, CYQ’s Executive Chairman Chris Singleton said, “We have been working on increasing shareholder value with initiatives aimed at improving our margins, and we have developed efficiencies in our supply chain which will compound when our manufacturing joint venture becomes operational”.
However it is an early stage of this company’s development and if considering this stock for your portfolio you should take all public information into account and seek professional financial advice.
The joint venture refers to a Memorandum of Understanding negotiated with Thompson and Kenneth Cheung which will provide the company with better buying power and more economical manufacturing through their joint venture partner’s Hong Kong operations.
More than 80 per cent of CYQ’s revenues for the quarter were generated from markets outside of Australia. Consequently, the distribution agreements it has in place in major global regions such as the US, Europe and South-East Asia should work in its favour in fiscal 2018.