By Stuart Condie
SYDNEY–Catapult Group International expects profit margin on new revenues to expand over the near term after the company reported a half-year of positive free cash flow for the first time in three years, the sports-technology provider’s chief executive said.
Australia-listed Catapult, which provides elite global sports franchises with performance-tracking devices and analytics software, on Tuesday reported US$1.4 million in free cash flow for its first half ended Sept. 30.
With fixed costs declining as a proportion of revenue compared with the six months through March, Catapult reported an incremental profit margin of 19%. It expects to make further progress over the second half toward its medium-term target of a 30% incremental profit margin, CEO Will Lopes said.
“Now that we’ve hit this inflection point, every incremental revenue that we add from here comes with a really, really high profit margin,” Lopes told Dow Jones Newswires in an interview.
Revenue rose 16% on the six months through March, and 20% from a year earlier, to US$49.8 million amid growth in new wearables users and upselling of services including video analysis to existing customers. Catapult also typically raises prices on contracts, which usually run for three years, by about 10% on renewal, Lopes said.
Catapult, which counts English Premier League soccer clubs, NFL franchises and NBA teams among its clients, narrowed its statutory half-year loss to US$8.4 million from US$22.6 million a year earlier. The company will likely conserve cash through fiscal 2025, Lopes said.
“We don’t see the need at this point to take a lot of that cash and invest in R&D. We have quite a bit on our hands in terms of the products,” Lopes said.
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