Wilson: Business growing, despite bad first quarter for iCreate
Newly listed training company iCreate Limited reported flat revenue at $12 million for the first quarter ending March, which lag projections when annualised.
The company, which listed on the junior stock market in February, says, however, that it has increased capacity to accommodate more students and expects revenue back on a growth trajectory by the second quarter.
The company also reported a $1.4 million first-quarter loss which arose from listing fees and other costs, and reversed the $2.2 million profit made a year earlier. Investors seem to have factored in the growing pains as shares in iCreate remained largely stable, up $0.01 to $0.86 following last Thursday evening’s release of the training company’s first set of financials since listing.
The $12 million quarterly revenue when annualised would equate to $48 million. That falls below the projection of $147 million for the year ending December 2019. Tyrone Wilson, president and CEO, told the Financial Gleaner that the flat revenues are the result of the company operating at full capacity, rather than a sign of a flagging business.
$56 million from IPO
Wilson anticipates that the infusion of cash from iCreate’s IPO being used to finance new equipment and new locations to house students will increase the capacity for revenue generation fourfold. In February, the company raised some $70 million in gross funding from its IPO, which netted out about $56 million after fees.
He said that the company purchased some $9.6 million worth of equipment in the quarter, including cameras, computers and access of online training material. Also, the company plans to open its Montego Bay centre in the quarter ending September and its Florida operation after the fourth quarter. The overseas operation will offer online training and short-term rental space for workshops and specific lectures.
“Our growth is dependent on our capacity. We didn’t have sufficient space or equipment. So we could not scale,” Wilson said on Monday. “Now we can increase our capacity four times over,” he said.
That will translate to the company returning to its revenue projections as outlined in its prospectus.
As detailed in the company’s prospectus, revenue over five years is projected to move from $147 million to $250 million to $295 million to $361 million and $406 million between 2019 and 2023. Annual profit is projected to grow from $7.9 million in 2019 to $62 million by 2023.
“We will work aggressively to attain those numbers,” Wilson said.
The iCreate stock is trading within the $0.80 range, which is below its IPO price of $1.01.
Since its formal listing on the market, the company has introduced several new courses, including its globally accredited digital marketing associate programme, which it will offer locally and overseas. Wilson said the course has generated steady interest despite being more expensive than the quick certificate programmes, such as podcast production or photography, which currently hold the bulk of traffic.