The RPMGlobal Holdings Ltd (ASX: RUL) share price is under pressure this morning, following the release of the company's results for the half year ended 31 December 2019.
At the time of writing, RPMGlobal shares are trading for $1.19 per share, down 1.24%.
What does RPMGlobal do?
RPMGlobal is a mining software and consultancy business, formerly known as RungePincockMinarco. Its major operations are the development and sale of mining software (a high-quality revenue stream), advisory (experts in mine design, takeovers and planning), and testing and compliance.
What did RPMGlobal report?
For the half year ending 31 December 2019, RPMGlobal reported total revenue of $41.1 million, a 13% increase over the previous corresponding period (pcp), while net revenue increased by 9%.
Profit after tax came in at $0.5 million, which was a massive $2.2 million improvement on pcp, when it reported a $1.7 million loss.
RPMGlobal's operating earnings before interest, tax, depreciation and amortisation (EBITDA) increased significantly by $3.9 million on pcp to reach $4.3 million, while operating costs increased by 2% to $31.9 million.
The company's advisory and consulting division's net revenue grew 21% on pcp. The division's financial contribution increased by $1.5 million to $2.1 to million, and its contribution as a percentage of net revenue was up by a massive 216% to constitute 19% of the company's overall revenues.
Net revenue in RPMGlobal's software division grew by 4% on pcp. Perpetual license sales in the division dropped by 48%, however the company reported that subscription revenue grew significantly by 388%.
RPMGlobal reported annual recurring revenue (ARR) from software subscriptions of $10.7 million to date, up from $4.3 million as at 30 June 2019.
Total contracted value (TCV) for the company from new software subscriptions sold to date came in $21.5 million, of which only $1.8 million was recognised in the first half financials.
RPMGlobal also reported $4.1 million in new perpetual license sales so far this financial year.
Cash outflow from operations for the first 6 months came in at $0.7 million, but the company noted that this number is always lower in the first half due to the majority of its annual software support payments being received in the second half.
Company outlook for remainder of 2020
RPMGlobal commented that its move to a software subscription licensing model is expected to accelerate as it offers this model to its existing perpetual customer base.
It further commented that its move into the into the area of design, announced last year, is proving to be a positive one.
