Human resources (HR) Software-as-a-Service (SaaS) provider Schrole (ASX: SCL) has had a better August than some, as its portfolio expanded beyond schools, appealing to mining companies looking to train new recruits.
It’s no wonder then that Schrole Develop, its training division, has been doing well, with sales for August 2023 at $200,000, up 34% on the prior corresponding period (pcp).
In the second half of 2023, Schrole saw momentum in its key growth metrics. Schrole’s software division improved its renewals to 88% for August 2023, a 20% uptick on renewals at the same time last year.
Sales from international schools using Schrole’s software tools were $154,000, the highest ever for the Company. The software sales include a repeat event series for education company Inspired Education and managed recruitment for an international school in Singapore. The Company’s candidate subscriptions reached $96,000 in August 2023, up 164% on pcp.
Managing Director, Rob Graham, said, “Schrole is now seeing the positive results of the increased sales initiatives over the last few months across the whole group. We are building our software business by retaining existing customers and gaining new ones, along with finding more cross-selling opportunities across our full-suite of HR SaaS solutions.”
He added, “The growth in the software business also pairs well with the outperforming of the training business, Schrole Develop. The sales momentum across the group has been positive during the second half of FY23 and we remain focused on seeing this continue.”
In the first half of 2023, Schrole’s revenue was up 21% on H1 CY22 to $2.99 million. While its software revenue increased by 23% to $1.90 million, its training revenue was up 17% to $1.06 million. Its EBITDA loss of $0.83 million was a minor improvement from pcp’s $0.88 million.
During H1 CY23, Schrole made some strides in the mining industry, as Schrole Develop delivered 28 on-the-job (OJT) training courses to 220 staff at Rio Tinto’s facilities in Western Australia for a total of $377,700. The Company also agreed to provide Rio Tinto with 47 OJT training courses over H2 2023, which has invoiced about $655,500.
Schrole feels that it has tapped into the significant potential of training services within the mining industry. It is currently pursuing opportunities in Work Health and Safety, and recently added the WHS Statutory Supervisor Course to its course list as this is a government mandated course for all supervisors in the mining industry.
Schrole has also restructured its Board and Executive Team to grow its market share of the international schools’ market, particularly across Southeast Asia and the Middle East. Over the first half, Diana Shepherd was appointed as CFO and the Company created a specialised role for Mark Oelofse as Chief Commercial Officer (CCO).
In the last quarter, Schrole’s CFO and the Executive team identified $1 million per annum in savings through completed projects and the ability to reduce costs across the business. These cost efficiencies are to be implemented in Q3 2023.
Thanks to improving training and software sales, the Company is progressing towards operating cash breakeven. Its August update signals positive momentum for shareholders.
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