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Netlinkz poised for growth with a strengthened balance sheet and increasing revenue

Published: 06:02 01 Sep 2021 BST

Netlinkz Ltd - Netlinkz poised for growth with a strengthened balance sheet and increasing revenue
The company is a networking vendor with a vision to create personalised connections for every enterprise user.

Netlinkz Ltd (ASX:NET) has reported continued strong revenue growth for the financial year ended June 30 2021, with revenue rising 174% over the prior year to $14.4 million (2020: $5.3 million).

China revenue grew by 196% to $11.9 million (2020: $4 million) with the revenue base now underpinned by growing recurring revenue through licensing and servicing contracts.

A number of these contracts are with global Fortune 100 companies across several industry sectors, including infrastructure, logistics, renewable energy, healthcare and retail services.

The company also strengthened its balance sheet with net assets of $21.4 million and $10.8 million in cash by the end of the year after raising $40.7 million in equity and settling $25.3 million in debt.

"A watershed year"

Netlinkz CEO and Managing Director James Tsiolis said: “The 2021 financial year has been a watershed year during which the company has invested to position the business for growth, addressed a complex and costly capital structure by buying out and settling all of the convertible notes and the majority if its debts, and removing itself from onerous advisory contracts.

“The China team delivered a strong financial result and will continue to build its customer base and recurring revenue stream.

“With a growing revenue base, recently established partnerships in regions with significant potential, and an experienced team to execute on its strategy, the company is confident of a much-improved profit result in the year ahead.”

Initiatives and growth

Europe-Uni Systems

The MOU with Uni Systems has been expanded to accelerate involvement in European R&D initiatives and go to market with large potential enterprise clients in Europe.

The parties will explore the potential for a joint venture during the course of this MOU.

Uni Systems has hired a senior executive with significant relevant global experience as the business leader of the venture.

MENA (Middle East North Africa)

Netlinkz continued during the year to execute new partnership opportunities globally, and recently executed a Joint Venture Agreement with Al Rabban International, Qatar.

The JV will establish an IoT lab in Doha, Qatar and develop the business in Qatar, Kuwait, Kingdom of Saudi Arabia, United Arab Emirates, Bahrain, Oman, Jordan, Lebanon, Egypt and Iraq.

Australia

In Australia, Netlinkz has established an alliance with SouthCloud, a telecommunications provider servicing rural customers across the country.

The relationship will see Netlinkz underpin the SouthCloud backbone in network security and improved data transmission, as well as the deployment of secure networking services to SouthCloud’s customers.

This alliance establishes a largescale telecommunications use-case for Netlinkz VSN software.

Netlinkz is also continuing to roll out a global go-to-market strategy through direct marketing, strategic regional partnerships and carrier models, aligned with its focus on diversified revenue growth.

Product delivery

COVID-19 is continuing to have a global impact on businesses, with work-from-home creating significantly more opportunity to meet the necessity for a robust integrated suite of cybersecurity solutions.

Netlinkz is a networking vendor with a vision to create personalised connections for every enterprise user.

The Netlinkz VSN solution is a NaaS (Network as a Service) proposition that is user-centric, creating a per-user private network that is available, secure and performance optimised, for authorised users regardless of their location.

Being a SaaS platform, enterprises have the flexibility to pay either based on consumption with no term commitments or per-user term-based subscription model.

The Netlinkz VSN allows enterprises to embrace their new normal by allowing IT departments to consistently enforce employee connectivity policies, simplify operations and improve security while directly correlating technology investment to user-productivity.

Strengthened balance sheet

Netlinkz issued 1.15 billion shares during the year, raising $43 million, before costs.

The capital raisings comprised:

  • Through cash: placement, entitlement offer and conversion of options in the amount of $22.4 million; and,
  • through non-cash: settlement of debt, share issue on cancellation of options and share issue on payment for services in the amount of $20.6 million.

As a consequence, the company had $10.8 million in cash and net assets of $21.4 million as at June  30 2021.

In addition to the above, Netlinkz undertook a clean-up of its capital structure by the settlement of $25.3 million in debt during the year.

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