One thing that may have been overlooked by the market is the size of the two new resellers. Ziggies supplies to over 300 W.A. schools and Lilydale Books to 30 schools. Keep in mind that Readcloud currently have only 360 schools on their books. Yes, resellers provide less margin to RCL on a per person basis, but the large number of potential additional users should still make a big difference.
It also gives RCL an opportunity to cross-sell their higher margin VET products into these new schools.
RCL will also see expansion into its existing school network as new year levels come on board, and we should also see new direct schools sign up. RCL are also in discussions with other new resellers.
All up, hopefully this year we'll see some decent cashflows fall through to the bottom line.
RCL Price at posting:
39.5¢ Sentiment: Buy Disclosure: Held
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