Snakk boosts first quarter revenue, slows cash burn

Mobile advertisement developer Snakk Media [NZX: SNK] lifted first-quarter revenue 15 % while clamping down on spending.

Sales rose to $2.27 million in the three months ended June, from $1.9 million in the same period a year earlier,

On a year-on-year basis the rate of cash spent fell 83%, with $146,000 spent in the first quarter, the lowest for the company in a three-month period, it says.

Gross margin rose 70%, the company says, without providing a specific figure.

"Trading in the first half of the year is traditionally slower than the second half. There has been a focus on cost management, product pricing strategies and margin control in order to deliver a strong commercial performance for the financial year," chief executive Mark Ryan says.

"With revenues of about $10 million a year, Snakk has now reached a point of scale where each dollar of revenue is used far more efficiently than when it was a smaller company," he says.

Snakk founder and chairman Derek Handley, who still controls 15% of the company, announced earlier this week he will step down as a director by the end of the year in a wider boardroom shuffle.

Director Michelle Kong will also retire after the September 16 annual meeting as the company looks to rejuvenate the boardroom, installing Sydney-based Peter James, who is chairman of Australian cloud hosting business Macquarie Telecom, as executive chair.

The company reported a loss of $4.2 million in the 12 months to March 31, more than twice the loss of $1.8 million a year earlier. Annual sales rose 40% as the mobile advertiser entered new markets in Asia.

Snakk's 2015 annual report was tagged by auditor Staples Rodway, which cited a "material uncertainty" over the company's ability to meet revenue targets and reach a financing agreement, while keeping an unqualified opinion on the accounts.

Snakk later issued a statement saying it had sufficient cash reserves to enable future growth.

Snakk's shares on the NZAX last traded at 4.8c, and have declined 47% over the past 12 months.

(BusinessDesk)

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