Urbanise's Q4 FY2024 Financial Results and Contract Dispute with Colliers Australia
URBANISE.COM LIMITED (UBN) Share Update July 2024 Tuesday 30th
Urbanise Reports Q4 FY2024 Financial Results and Contract Dispute
Urbanise.com Limited (ASX: UBN), a leading provider of cloud-based SaaS platforms for strata and facilities managers, has released its Q4 FY2024 financial results and provided an update on a contractual dispute with Colliers Australia.
Instant Summary:
- Q4 FY2024 licence revenue increased by 10.2% to $3.0 million.
- FY2024 licence revenue increased by 5.1% to $11.7 million.
- 17 new contract wins in Q4 FY2024, totaling $237k in ARR and $159k in professional fees.
- Contract dispute with Colliers Australia over $3.0 million in unpaid development costs and fees.
- Closing cash balance of $1.9 million with no material debt.
Financial Performance
Urbanise reported a strong performance in Q4 FY2024, with licence revenue increasing by 10.2% to $3.0 million compared to the prior corresponding period (pcp). For the full fiscal year, licence revenue grew by 5.1% to $11.7 million, driven by new contract wins and implementations.
During Q4 FY2024, Urbanise secured 17 new contracts, totaling $237k in annual recurring revenue (ARR) and $159k in professional fees. The company also reported a significant increase in its sales pipeline, reflecting improvements in its sales approach across key markets in APAC and MENA.
Contract Dispute with Colliers Australia
Urbanise disclosed a contract termination dispute with Colliers Australia on 24 July 2024. The dispute involves a claim by Urbanise for over $3.0 million in unpaid development costs and fees. The potential impact on run-rate ARR is approximately $500k. Urbanise is seeking to resolve the dispute at the earliest opportunity.
Cash Flow and Financial Position
Urbanise reported a closing cash balance of $1.9 million as of 30 June 2024, down from $4.2 million at the same time last year. The decrease was primarily due to $1.2 million in late payments from three Middle East customers, who have committed to pay over the next three months, with $812k already paid in July 2024.
The company has no material debt, other than annual insurance premium funding and lease liabilities. Urbanise aims to reach cash flow positive in FY2025 through driving ARR wins and prudent management of costs and working capital.
The financial results indicate a positive trend in Urbanise's revenue growth, which could boost investor confidence. However, the contract dispute with Colliers Australia introduces uncertainty and could negatively impact the company's financial performance if not resolved promptly. The late payments from Middle East customers also highlight potential cash flow challenges.
Investor Reaction:
Analysts are likely to have mixed reactions to Urbanise's announcement. While the revenue growth is a positive sign, the contract dispute with Colliers Australia and the late payments from Middle East customers may raise concerns about the company's financial stability and operational challenges.
Conclusion:
Investors should closely monitor the resolution of the contract dispute with Colliers Australia and the collection of outstanding payments from Middle East customers. Urbanise's ability to achieve its goal of becoming cash flow positive in FY2025 will be crucial for maintaining investor confidence.