After implementing some strategic and leadership changes, human resources Software-as-a-Service (SaaS) provider Schrole Group (ASX: SCL) saw increased sales in November 2023 in its software and training divisions and ongoing improvement in software renewal rates.
As per the Company, this marks its highest November sales, totaling $1.2 million, reflecting a 17% increase compared to the same period last year. The training segment, Schrole Develop, demonstrated continued growth with November 2023 sales of $240,000, showing an 8% improvement over the prior corresponding period. In September and October 2023, Schrole Develop’s sales amounted to $450,000, indicating a 22% increase compared to the same period in the previous year.
Managing Director Rob Graham said, “Schrole continues to see positive outcomes from the revised sales strategies implemented across the company in recent months. It is also good to see that the cost-cutting initiatives have had an immediate and positive impact on the business. The changes made to the management structure over the past nine months, as well as the introduction of a new commercial strategy led by the Chief Commercial Officer (CCO) and supported by the Director of Customer Experience and the Director of Professional Development, have centred on refining our sales, customer support and renewal communications.”
Working in the education and training sectors, Schrole is seeing growth momentum in the closing months of CY23. November 2023 demonstrates the continued success of its key growth indicators, including sales and renewals.
The software unit achieved a customer retention rate of 81% for September, October and November, marking a 20% increase from the 61% recorded in PCP. Plus, the Net Revenue Retention (NRR) for the same period stands at 97%, reflecting a notable improvement of 33% from the 64% recorded on PCP. In November 2023, international school software sales reached $184,000, showcasing a 16% enhancement compared to PCP.
This can be attributed to the growing adoption of Schrole HR, with 75 new Engage licenses sold since April 2023. The Company continues to assess discretionary spending items to extend the cash runway. Total annualised savings identified and implemented from July 2023 through to December (month to date) 2023 is about $2.3 million.
Schrole has also got SaaS products at different stages of development. In early growth, “Connect”—a recruitment platform—is a crucial revenue source targeting schools and teachers. Investment in its development is set to decrease over the next 12-18 months. In the introductory stage, “Engage” (onboarding and contract management) and “Verify” (background screening) generate revenue but still need investment for international competitiveness and positive cash flow. Finally, its staff relief platform “Cover” is set for redevelopment and relaunch in 2024.
In H1 CY23, Schrole’s overall revenue rose by 21% to $2.99 million, with a 5.7% improvement in EBITDA loss to $0.83 million. The Company also undertook some leadership changes, including appointing Diana Shepherd as CFO, Mark Oelofse as Chief Commercial Officer, Matt Adams as Chairman and Dr Caroline Brokvam to the Board.
As of 30 November 2023, the Company recorded a cash balance of approximately $1.2 million compared with cash on hand as of 30 September 2023 of $798k. The Company has no debt.
Alinda is a Business Reporter for The Sentiment
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