Samarkand Group PLC (AQSE:SMK), the cross-border eCommerce technology solution provider focused on China, saw revenues triple in the financial year to the end of March.
Revenue soared to £20.6mln from £6.8mln the previous year, boosted by contributions from acquisitions, while like-for-like (LFL) revenues, excluding one-off revenues, more than doubled to £14.8mln from £6.8mln.
The Nomad Technology unit’s revenue rocketed 317% to £6.4mln from £1.5mln the year before; brand ownership revenues rose 66% to £3.5mln (2020: £2.1mln); and distribution revenues climbed 51% to £4.8mln (2020: £3.2mln).
Earnings before interest, tax, depreciation and amortisation (EBITDA) turned positive at £1.1mln from the previous year’s loss of £828,971, while the adjusted EBITDA, which excludes exceptional revenues, stock market listing fees and share-based payment charges, saw losses halve to £418,675 from £828,971 the year before.
Samarkand Group's gross margin (excluding exceptional revenues) increased to 62% (2020: 48%) as a result of the group's continued development of its business-to-consumer capabilities and the transition away from its low margin business-to-business (B2B) distribution model. In addition, the increased gross margin performance reflects the group's focus on technology and services, which typically yields a higher margin than distribution sales, Samarkand said.
As a result of the proceeds raised at the company’s flotation In March, the group has moved from a net debt to a net cash position. At the financial year-end, the group's net cash position was £11.6mln (2020: net debt £5.9m).
The group has a “buy in the West, build in the East” strategy and the improved cash position has enabled it to accelerate this to significantly increase investment its technology and operational teams and enabled it to begin expansion into other international markets starting with Japan and continental Europe.
“Chinese eCommerce is only set to grow in significance moving forwards and our offering provides the optimal route for Western brands to penetrate the notoriously difficult Chinese market. The future of the company is extremely bright and I am excited to continue delivering on our stated strategy in the coming months,” said David Hampstead, the chief executive officer of Samarkand.