FOR IMMEDIATE RELEASE
(BRISBANE, AUSTRALIA – 27 April 2021) Sports, leisure and hospitality SaaS technology provider MSL Solutions Limited (ASX: MSL, “MSL”) is pleased is pleased to provide the Company’s Q3 2021 Business Update.
Financial and operational performance
In Q3 FY21, MSL achieved its third consecutive quarter of positive operational cash flow, with net cash from operations rising by $1.3 million year-on-year to $1.3 million.
Building on MSL’s strong H1 FY21 results, the Company is on track to record a full year of consistent cash generation from operations. This marks a step-change in the cashflow profile for the group, as indicated by the quarterly cashflow chart above.
The Company is proud to have achieved this result with reduced support from government subsidies in the quarter. The Company received $AUD 50k in Government subsidies in the quarter, all from the UK Government Coronavirus Job Retention Scheme.
With a first full quarter contribution from SwiftPOS following its acquisition by MSL in November 2020, the Company achieved customer receipts of $7.2 million, the highest quarterly total since Q1 FY20 and an increase of 20% from Q2 FY21.
Cost initiatives implemented last year kept operating expenses down during the quarter, supporting the outlook for earnings margins in the next phase of growth.
The Company retains significant financial flexibility. The Westpac facility remains undrawn with approximately $840k available as at 31 March 2021, with overdraft facilities of approximately $500k also undrawn. Repayments of the Export Finance Australia loan announced to the ASX on 14 December 2020 will commence on 30 April 2021.
After the end of the quarter, the Company continued its strong progress in Venues by signing a 5- year contract with leading global venue and event management company, ASM Global, to provide mobile point-of-sale (POS) solutions to 22 ASM venues across the United Kingdom.
This agreement will see some of the UK’s most iconic sports, leisure and entertainment venues convert across to MSL and Kappture’s stadium-specific POS solution, including:
The contract will see MSL earn a combination of upfront software, hardware and services revenue plus annual support revenue over the initial 5-year term, with total contract value of £1.96 million (~AUD$3.5 million) which will provide a boost to MSL’s annualised recurring revenue of £188k (~AUD$335k).
The contract builds upon MSL’s existing relationships with ASM Global, Australia’s largest venue operator, which in September 2020 saw the parties agree to a 5-year POS agreement covering RAC Arena in Perth, Australia.
To varying extents, the activities of venue operators, sporting clubs and other MSL customers across leisure and hospitality continue to face the risk of disruption due to COVID-19. However, this risk has decreased over recent months, and while vaccine rollouts have been inconsistent across MSL’s geographies, these efforts continue to support higher business confidence among our customers.
The UK particularly has benefitted from the pace at which it is vaccinating its population, while Australia’s relatively low rates of community transmission have allowed an easing of the harsher restrictions on recreational activities which were imposed early in the policy response. This easing has allowed the Melbourne Cricket Ground to set a Southern Hemisphere post-pandemic record for event attendance on 25 March 2021, with fans numbering more than 51,000 to see Collingwood take on Carlton while as recently as 25 April 2021, 78,113 fans attended the Collingwood v Essendon match which is a global post-covid attendance record.
Management continues to explore acquisition and partnership opportunities which offer the potential to strengthen MSL’s technology platform and product suite to accelerate revenue growth.
MSL Solutions CEO, Pat Howard, said:
“MSL is on track to achieve a full year of its operations generating the cash to fund its activities. This is an important milestone for our business as we continue to deliver our growth strategy.”
“As venues and sporting organisations look to position themselves for the favourable conditions expected after the vaccine rollout, MSL’s upgraded product mix and growing international profile will fuel its ability to expand during the recovery.”
“Recent strategic and marketing initiatives will allow the Company to leverage the shift from on- premises digital infrastructure to cloud-based infrastructure which was accelerated by the pandemic. Similarly, we expect the adoption of in-seat ordering and other guest experience enhancements that have been a by-product of restrictions to remain post-COVID and support interest in our POS extension and guest engagement solutions.”
About MSL Solutions Limited
MSL Solutions Limited (ASX: MSL) is a SaaS technology provider to the sports, leisure and hospitality sectors. We help some of the world’s most iconic venues around the world – stadiums & arenas, pubs & member clubs, sporting associations, golf federations and more – to deliver outstanding customer experiences during every engagement.
MSL develops and delivers fully integrated and modular systems that connect customers to venues through mobile and contactless entry, ordering and payment solutions. We seamlessly connect front-of-house to back-office, offering an end-to-end guest engagement platform which provides actionable insights on key success metrics to venues of all sizes.
MSL Solutions has over 5,000 customers with offices in Australia, UK and Denmark.