Australian-listed BikeExchange illustrated in its 2022 financial year update how, under new management, the company is turning a corner after a torrid period since going public in February last year.
The last 12 months have been a period of restructuring, particularly around acquisitions such as cycling logistics and the Kitzuma assembly arm, as well as personnel changes that have reduced headcount and other core costs.
Although incurring short-term costs, personnel changes would now have reduced spending by $5.5 million in FY22, with further reduction in spending expected outside of staffing .
The refocusing has intensified since CEO Mark Watkin left the company in May after successive months of falling stock prices. Ryan McMillan is now the new CEO, having served as COO. Kathy Kotsiopoulos will become Chief Financial Officer and Sam Salter the new Head of Strategic Partnerships.
Right now, the stock price is trading at a 90% discount from its IPO price, near a 52-week low of 0.021. The stock price responded positively to the company’s update, up 5% at the ASX’s close on Tuesday.
The activity could well be driven by its position as the world’s largest platform for second-hand sales and partnership shops. Consumers looking to ride a bike as part of a drive to cut costs will find that BikeExchange’s global offering features plenty of listings, across all categories, usually at a great price and now with Kitzuma’s ability to ensure delivery in certain markets.
BikeExchange Group’s overall revenue increased 41% for fiscal 2022 to $6.8 million, with most divisions of the business responding positively.
North American trade, in particular, got off to a good start, up 137% from the previous corresponding period. Here, the recently acquired Kitzuma showed its value to the company, delivering $1.19 million in the second half of the fiscal year alone. Kitzuma will launch a consumer shipping program to further enhance its offering and revenue capabilities.
Total deal value, a key indicator of the company’s profitability, increased 22% as both volumes and value increased.
As cost control efforts continue, the company has been unable to completely rein in cash outflows with an additional $12.24 million in cash flowing out for payments to vendors and employees. Net loss for the year fell from $11.12 million to $14.3 million.
To stabilize its balance sheet, the company raised $6.3 million in FY22 and previously said it would raise additional capital to focus on improving sales conversion rates. The company ends the year with $4.89 million in cash and cash equivalents.
CyclingIndustry.News reached out to BikeExchange this week to confirm whether the second-hand market is indeed bucking the trend, with consumers making more cost-conscious purchases. We hope to follow soon.