ICreate and Edufocal Report Improved Six Months Net Profit

  • Junior market companies ICREATE Limited (ICREATE) and Edufocal Limited (LEARN) which operate in the education space, both reported higher net profits in their most recent six months. ICREATE reported a net profit of J$16.50Mn (EPS$0.09) for the period ended June 30, 2022, a 271.8% improvement over 2021. LEARN recorded a net profit of J$11.58Mn (EPS $0.02) for its six months ending June 2022 versus a deficit of J$5.25Mn in 2021.
  • Both ICREATE (239.1%) and LEARN (163.9%) saw vast improvements in revenues as business activity increased. ICREATE’s performance was positively impacted by a mix of new business clients as well as existing opportunities from their pipeline which were closed in Q2. LEARN saw an increase in its Edufocal Academy division as schools reopened, and from the business division due to the onboarding of new corporate customers.
  • While ICREATE recorded a 680.3% increase in its cost of sales, both companies saw a 108.4% (ICREATE) and 88.9% (LEARN) rise in their administration and general expenses. Although this weighed on profitability, owing to strong revenues ICREATE’s net profit margin rose from 18.6% to 20.4%, while LEARN saw a turnaround from -10.4% to 8.7%.
  • There has been a noticeable increase in the demand for digital creative and design training, especially among large institutions which ICREATE intends to capitalize on by aggressively pushing business growth across its divisions including digital marketing and advertising. Management is also actively working on several M&A and other Joint Venture collaborations. This should support continued strong revenue growth while the company looks closely at managing cost efficiencies.
  • The acquisition of Clever School Teacher (CST), a software as a service (SaaS) business in March 2022 allowed EduFocal to forge a pathway into the American edtech marketplace. The large database of content which was acquired should also enhance its ability to reach other territories and attract new customers. The company is currently in conversations to leverage the content for B2B opportunities in both the United States and Jamaica, which is expected to support revenue growth in the coming quarters.
  • ICREATE’s stock price has increased by 443.2% since the start of the calendar year while LEARN increased by 178.0% since listing on March 15, 2022 ICREATE and LEARN closed Wednesday’s trading session at $4.22 and $2.78, respectively. LEARN currently trades above the Junior Market Others Average with a P/E of 61.8x. ICREATE currently trades at a P/B of 49.9x which is above the Junior Market Other P/B average of 10.2x.

(Sources: JSE & NCBCM Research)