Syft Technologies has just completed its 31stMarch financial year and this note is to update investors in advance of the audited results which are available in June.
Sales are up more than 50% from the previous financial year, and more than double from 2 years ago. This result is slightly below forecast though, driven by the timing of a 3-instrument order arriving in April rather that February as expected. Average sales price is in line with budget, a 21% increase from last year, through the combination of higher prices, new developments, and more direct sales. Support, leases, and other income was higher than expected and continues to be an area of growth. Gross Margin is still high, and higher than last year, but less than we forecast.
Our sales force has increased significantly from last year, but not as quickly as planned. However as expected, our sales people were more effective than the 2 units/person we forecast, and this highlights what we can achieve with as we ramp up recruiting and training.
While we never have complete certainty of future sales, due to the nature of our business (i.e. large capital items) we see significantly more prospects and activity which bodes well for this financial year.
This rapid growth in sales has caused us problems in production that we need to address better. Manufacturing costs are up due to a combination of new products, new staff, and poor inventory control. These are addressable but require a greater focus and mindset change to make the transformation to a much larger business.
Production issues have also had an impact on development. We have spent significantly more money on production development than expected, and development in general as we fix up issues that are slowing production. This work has also meant we have not had the development resource to make the progress on new initiatives we anticipated, and as a result, production costs will be higher than forecast in FY2019.
The net result of these differences is a profit figure, while higher than last year, is lower than forecast.
While this is not the result we hoped for, we at Syft remain highly confident of the long-term prospects of our business. The speed of our growth has challenged us, but with the ramp up in financial resources and manpower, we can make the necessary changes to our business and deliver our objective of large long-term profits.