Cycliq achieve strong fourth quarter result with more to come in fiscal 2018
Published on: | by Trevor Hoey
The developer and distributor of high-definition camera and lighting combinations for bicycles undertook numerous overseas distribution initiatives over the last six months, and this has begun to gain traction.
While total unit sales increased 46% on a quarter on quarter basis, international sales accounted for 81% of revenue.
Fourth quarter revenues of $664,118 represented a 52% increase compared with the March quarter. The strong increases in sales and revenues can also be attributed to CYQ’s commitment to developing brand awareness, both in Australia and overseas.
The company added more than ten new channels in the third quarter, providing the foundation for positive sales momentum in the three months to June 30.
In Australia, the transition to the House Account/Retailer sales model has shown traction with large corporate’s such as 99 Bikes, Pushys and Bikebug underpinning the lift in Australian sales volumes.
From an overseas perspective, it was Korea, the United Kingdom and the US that mainly contributed to strong international sales growth.
CYQ is continuing to invest in product development, including improvements to the Fly6 and Fly12 devices. Management has flagged the rollout of new products in fiscal 2018.
The performance of each device can be seen in the following graph.
It should be noted, however, that any further catalysts are speculative at this stage and should not be taken as guaranteed. Investors should seek professional financial advice for further information.
CYQ continues to strengthen its geographical reach, and after registering for VAT in the Eurozone the company will be well positioned to expand into that market.
With some of the upfront capital investment now behind it, CYQ should see some margin improvement in the coming 12 months.
Management also noted that the proposed joint venture with Thompson and Kenneth Cheung will reduce the cost of new product development and the overall manufacturing costs of CYQ’s products, the benefits of which should be realised in the second half of fiscal 2018.
Consequently, while CYQ has delivered a strong fourth quarter result and executed on transformational changes in fiscal 2017, from a financial perspective the company’s efforts are likely to reflect more prominently in its fiscal 2018 performance.