Smart lockers company TZ Limited (ASX: TZL), serving clients like Apple, JLL, adidas, NSW Health and more, has reported a positive net cash inflow from operating activities, totaling $775,000 in Q2 FY24.
Key components of the operating cash flows included receipts of $5 million, coming to $8.8 million year to date. It also reported payments for product manufacturing and operating costs of $2.26 million, staff costs of $1.38 million (a 35% decrease from the previous year), and administration, corporate, and other costs of $560,000.
In TZL’s recent business update, the indicative and unaudited first-half FY24 results highlighted a revenue of $8.07 million and an EBITDA of $780,000. The second quarter of FY24 showcased a positive operating cash flow of $775,000.
Notably, the overall performance achieved the targeted margin of 50%. Additionally, the current recurring revenue stands at $277,000 per month, steadily advancing towards the annual target of $3.6 million. These results indicate positive trends and progress for the Company in the fiscal year.
On the other hand, as at 31 December 2023, TZ Limited’s loan facility of $3.5 million with First Samuel Limited was fully drawn. First Samuel has approved the extension of the $2.5 million Debenture tranche, originally maturing on 31 January 2024, to a new maturity date of 30 June 2025. Another $1 million Debenture tranche maturing on 31 January 2024 will be rolled over to 30 June 2024. TZ Limited plans to repay the $1 million Debenture maturing on 30 June 2024, with a payment of $500,000 on 31 March 2024 and the remaining $500,000 on 30 June 2024.
TZ plans to pay off an additional $1 million of the $2.5 million Debenture on 30 June 2025. Discussions between TZ and First Samuel about the remaining $1.5 million will start on the same date.
Providing a range of smart locker solutions, TZ Limited was founded in 1998 providing a more comprehensive set of smart device solutions until new economic conditions demanded a new approach. It functions across industries like retail, health, education, postal and more, and operates four regional subsidiaries based in Sydney, Singapore, Chicago and London to support its businesses in ANZ, Asia, US/Americas and EMEA respectively.
In November of last year, TZI Australia landed a significant purchase order worth $2.6 million to provide Smart Lockers, System Electronics, and Software to a global transport and logistics company based in Europe, RICOH. The supply commenced before 2023 ended, with the project expected to conclude in early 2024.
Moreover, in a bid to cut costs in FY24, it rationalised its supply chain and renegotiated supply terms, resulting in about 20% production savings.
Currently, TZ Limited is conducting a review of different corporate opportunities, exploring options like potential acquisitions, divestments, mergers, and strategic investor collaborations. This aligns with the Company’s goals for FY24: rebuild client trust and relationships, enhance business efficiencies and achieve profitability.
Alinda is a Business Reporter for The Sentiment
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