Quickflix seeing good revenue growth14/04/2008 01:08PMAEST
Australia's largest independent online movie subscription company Quickflix Ltd said strong revenue growth continued in the March quarter as total subscribers increased by 22 per cent.
Quickflix on Monday announced that revenue receipts were up 14 per cent to $1.68 million for the quarter ending March 31, 2008.
In the three month period, total subscribers grew to 28,913, more than double the level of a year ago, Quickflix said.
The company, which offers a choice of over 30,000 movie and TV series titles, now has more than 25,000 paying subscribers and recurring monthly revenues in excess of $500,000.
Quickflix managing director Simon Hodge said the company's previously announced cost reduction and performance enhancement program was well advanced and will be completed in June 2008.
"At that point, Quickflix is expected to become sustainable generating sufficient monthly income from its paying subscribers to cover its operating expenses and a reduced maintenance level of marketing activity and DVD inventory investment," he said.
"The net cash outflow for the June quarter on this basis is expected to reduce to approximately $300,000 as expenditure ramps down to nil by June 2008."
Total expenditure for the quarter was down 10 per cent to $2.7 million.
The reduction in total expenditure was in line with the planned completion of significant investments in content and technology in the previous quarter and continuing improvement in operating performance, it said.
Cost savings were driven by reduced staff costs, a 32 per cent reduction in DVD library investment, a 48 per cent fall in technology investment and a 23 per cent dip in other operating expenses.
Mr Hodge said funds from a recently announced non-underwritten capital raising for up to $4.9 million would be used for marketing aimed at gathering new subscribers and associated investment in the DVD library as it looks to grab market share from major rival, Bigpond Movies.
"The full amount of the proposed raising provides the funding the directors believe Quickflix will require to grow its subscriber numbers to a self-funding level of 50,000 paying subscribers within 12 months, without requiring further capital from the equity market," Mr Hodge said.
Digital media entrepreneur Destra Corporation is the largest shareholder in Quickflix at 19.9 per cent, followed by regional TV network WIN Corporation, which holds a 14 per cent stake.
By 1220 AEST, Quickflix shares were trading steady at 7.5 cents in a broadly lower market.
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