GO2 People Ltd (ASX:GO2) is waiting on a number of tendered contracts to be awarded this quarter after the company increased group revenue 37% in the December half-year compared to the previous corresponding period.
The Western Australian company said last week its December half-year growth had set a “solid foundation” for continued growth in the June half-year of 2019.
The addition of large national and multi-national construction and mining contractors to its client list in the December 2018 half-year underpinned the growth of the company located near the fly-in, fly-out hub of Perth Airport.
Speaking on the company’s corporate goal to triple its business operations from the time of its October 2017 listing on the Australian Securities Exchange, G02 managing director Billy Ferreira said: “We are very confident that we will achieve our target of tripling the business from its listing date.
“As a group, we continue to achieve important internal milestones in line with our strategic plan, which are important metrics we use to hold ourselves accountable.”
The company’s recruitment division had strong revenue growth “on the back of consistency in workforce personnel numbers since the beginning of financial year 2019”.
GO2 Building completed its first Western Australian state government contract in the December half while being awarded its first Western Australian local government contract for the Shire of East Pilbara.
Shire of East Pilbara is the largest local government area in Australia, covering more ground than Victoria, and includes the towns of Newman, Marble Bar and Nullagine
The building arm also achieved ISO Accreditation for Health, Safety, Environment and Quality in November, a milestone for its team.
GO2 Building’s full-year revenue will depend on new contract wins as it holds “meaningful discussions with tier-one miners” in WA.
The business unit was named the preferred tender provider for a number of contracts during the December quarter, with these to be awarded this quarter.
GO2 launched its Dream Now indigenous traineeship last quarter to increase its capability to meet demand for indigenous workers from existing and potential new clients and major projects nationwide.
The company also maintained its consistent safety performance in the December quarter, maintaining zero lost-time injuries since listing in October 2017.
GO2 ties the result to its bottom line, saying “improvement in this area is expected to result in reduced workers compensation premiums — and therefore improved labour hire margins — year to year.”
The company previously released its 2017-18 annual report last September and shared that it expected to achieve a net profit after tax in the 2019-20 financial year.
Ferreira said at the time: “We anticipate a continuation of the trend towards positive EBITDA in FY19 and net profit after tax (NPAT) in financial year 2020.”
The company leader told the Proactive Investors Stocktube video channel: “The next couple of years as we continue on that path we’ll be able to show that positive return for shareholders, with a stable overhead structure, no compromising on margin and increased revenue.”
GO2 had receipts of $15.6 million from customers in the December quarter and $30.5 million in the December half, to end up with $632,000 net cash from operating activities in the quarter and $210,000 in the half-year.
The company used $24,000 on investing activities in the December quarter, while it netted $3,000 in the December half.
The sum used in financing activities came in at $1.2 million from the quarter while its half-year sum was $1.3 million.
Among the line items was a $30,000 partial loan repayment to one of its directors’ companies, GO2 Skills and Training Pty Ltd, a Queensland-incorporated training and leadership courses business which was acquired during the period for $465,000 via the assumption of loan balances.
The company had $104,000 in standby arrangements at the end of the quarter, with the full amount of the debtors and finance lease funding facilities drawn down.
GO2’s cash reserves were $1.5 million on December 31, a decline of $557,000 on the quarter ended September 30.
The company tipped estimated cash outflows of $13.3 million for March quarter 2019, with $11.6 million of the estimate being for product manufacturing and operating costs.
GO2 full-year revenue performance for the past two financial years
Tightly-held GO2 had 117,964,583 shares on issue on September 19, with its top 20 shareholders holding 73.01% of the company.
Substantial shareholders Everglades Investment Pty Ltd <Everglades Discretionary A/C> and Goldfinch Discretionary Pty Ltd <Goldfinch Discretionary A/C> held equal top stakes with 23.31% of fully-paid ordinary shares on issue.
JP Morgan Nominees Australia Limited came next with 7.33 and HSBC Custody Nominees (Australia) Limited with 4.32%.
— with Jessica Cummins