Workplace management solutions company Damstra Holdings (ASX: DTC) has signed a three-year agreement plus two one-year options with Aussie coal producer New Hope Corporation. The three-year agreement has an estimated contract value of $1.2 million.
New Hope will implement the Company’s new Enterprise Protection Platform (EPP). The EPP will cover New Hope’s employees and contractors and look after forms, workflows, and learning as per the agreement. This will cover all their mine sites, port facilities, and agricultural operations.
Damstra Chief Executive Officer, Christian Damstra, said, “We are delighted to have signed this agreement with the New Hope Group, a long-established Australian energy company. This agreement further demonstrates how clients perceive and are adopting our EPP offering.”
Damstra’s EPP is a cloud-based Software-as-a-Service (SaaS) platform combining an organisation’s different tools, resources and software on one platform. For instance, if a company uses CRM and analytics tools, instead of accessing them independently on different tabs and platforms, the company can use the EPP to track all of them at once.
Along with that, the EPP offers actionable insights that enable and automate business processes and data flows related to security, training, and safety requirements. It links together existing third-party tools and technologies—in real-time—to maximise investment performance, improve decision-making and reduce incident management and operational risk.
During FY23, Damstra undertook a major cost reduction program, which delivered approximately $9 million of annualised savings. These cost savings helped bolster its overall FY23 report, especially the final quarter.
In FY22, Damstra’s free cash flow was negative $12.8 million, but in FY23, it saw an improvement of $9.5 million to a negative $3.3 million. Notably, the Company reported a positive free cash flow of $500k in Q4 FY23.
Its operating cash flow saw a significant uptick, amounting to $7.1 million, up from a negative $3.5 million in FY22. In every quarter during FY23, Damstra achieved positive operating cash flow.
What’s more, in FY23, the Company cemented its profitability with an EBITDA of $7.2 million, up from FY22’s $500k.
Its revenue, including the joint venture in equity, amounted to $29.8 million, largely remaining flat compared to FY22. This modest growth was due to Damstra undertaking a business restructure, overhauling its core business operations. Plus, its revenue in North America reached $2.4 million, marking an impressive surge of 247%.
The Company is entering FY24 with positive business momentum. It forecasts its R&D costs to decrease as revenue increases, its legacy systems are retired and a new “cost project” is implemented. Already, in August 2023, it reported $2.8 million in cost savings, as it closed two of its offices, integrated its systems, reduced business support costs and a non-executive director (NED) salary sacrifice.
Besides this, Damstra is emphasising product development, as EPP was broadened to include more client solutions instead of just integrated products and modules. The EPP now analyses and assists.
The deal with New Hope permits the utilisation of Damstra’s hardware and access control solutions as needed. Revenue is generated on an annual recurring basis (ARR). The implementation process has already started, with expenses for training and extra services being compensated based on an agreed-upon daily rate.
Alinda is a Business Reporter for The Sentiment
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