iCreate reports six months net loss of $9.34 million

Date: September 2, 2019

iCreate Limited (ICREATE) for the six months ended June 30, 2019 reported revenues of $25.02 million, up from $19.74 million reported a year ago. For the quarter, ICREATE posted $13.13 million ( 2018: $8.25 million) in revenue.

Management noted, “Our Kingston location accounts for approximately 98% of total revenues, signalling a strong demand for our courses, which is expected to continue with the completion of our Kingston and Montego Bay build-out.”

Total direct costs totalled $6.74 million for the six months period compared to $4.47 million for the first six months of 2018. Thus, resulting in gross profit of $18.29 million relative to $15.27 million booked last year. Gross profit for the quarter amounted to $9.66 million versus $2.53 million booked for the second quarter of 2018. Other income for the period amounted to $292,905 relative to $2,315 for 2018, while the second quarter totalled $102,150 (2018: $1,733) for other income.

Administrative expenses rose 46% to $25.93 million (2018: $17.74 million) for the six months. Depreciation and amortization expense increase year over year to close at $1.19 million versus $307,522 recorded for the corresponding period in 2018.

As such, operating loss for the period closed at $8.54 million in contrast to a loss of $2.77 million for the corresponding period of 2018. Operating loss for the second quarter closed at $7.52 million (2018: $5.78 million). iCreate noted that this loss, “was primarily due to increased operating expenses during the second quarter of $6.07m associated with our expansion activities.”

Finance cost for the first six months amounted to $792,410 relative to $877,968. Consequently, net loss for the six months period amounted to $9.34 million versus a loss of $3.65 million twelve months earlier. For the second quarter, net loss totalled $7.85 million compared to $6.43 million booked in the corresponding quarter last year.

Loss per share (LPS) amounted to $0.05 compared to a LPS of $0.02 for the same period of 2018. The loss per share for the quarter amounted to $0.04 (relative to $0.03 reported in 2018. The trailing twelve months LPS is $0.09. The number of shares used in this calculation was 197,592,500 shares. iCreate traded on September 2, 2019 at $0.84.

Management noted, “Since our IPO, we added approximately 1,500 sq ft of training space, in addition to increasing the amount of training equipment to satisfy the demand being experienced at our Kingston location. This is driven mainly by our creative courses (photography, video production & graphic design etc) which have all been oversubscribed during the quarter. Additionally, for the Montego Bay location, we outfitted another 1,500 sq. ft of training space to get operations underway. We successfully started a cohort for our Digital Marketing program in Montego Bay and will be introducing the creative certificate courses in Q3. The increased space in Kingston and the addition of the Montego Bay location was one of our IPO mandates. This will now give iCreate the opportunity to roll out a number of new courses, which will be important to growing the business.”

Balance Sheet at a Glance:

As at June 30, 2019, total assets increased to close at $46.24 million (2018: $19.96 million). The increase was largely due to increases in ‘Cash and Cash Equivalents’ and ‘Property, Plant & Equipment’ which closed at $7.26 million (2018: $655,619) and $21.57 million (2018: $6.15 million), respectively.

Shareholder’s equity totaled $29.88 million compared to a shareholders’ deficit of $3.15 million quoted as at June 30, 2018. This resulted in a book value of $0.016 (2018 shareholders’ deficit: $0.151).

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