Advantex Announces Fiscal 2024 Financial Results

CNW Group

Mon, Oct 28, 2024, 3:32 PM 4 min read

TORONTO, Oct. 28, 2024 /CNW/ - Advantex Marketing International Inc. (CSE: ADX) ("Advantex" or the "Company") today announced its financial results for the fiscal year ended June 30, 2024. All results are reported under International Financial Reporting Standards ("IFRS") and in Canadian dollars, unless otherwise specified.

Key Financial Highlights:

Total Revenue for Fiscal 2024 was $3.18 million, an increase of 51% from $2.11 million in Fiscal 2023. The growth was primarily driven by strong performance in both the Merchant Cash Advance (MCA) program and increased marketing activities from the Aeroplan program.
Gross margins from the MCA program decreased from 91% to 82% mainly due to the business experiencing higher than expected delinquent accounts in March 2024 to the tune of $0.4 million. Despite the delinquencies, the Company successfully expanded its customer base, which underscores its strategic positioning. Gross margin for the Aeroplan program remained consistent with the previous year at approximately 30%.
Net Loss for Fiscal 2024 was $2.7 million, compared to $2.53 million in Fiscal 2023. The loss was largely due to interest costs on debentures and other financing charges.
EBITDA (earnings before interest, taxes, depreciation, and amortization) improved significantly to $0.51 million, from a loss of $0.10 million in Fiscal 2023. The positive EBITDA highlights the Company's ability to navigate the current economic environment and effectively compete in the market.

Operational Efficiency and G&A Improvement:

G&A decreased to $1.11 million, down from $1.21 million in Fiscal 2023. This reflects focused cost control measures, improved operational efficiency, and scaling benefits from the MCA and Aeroplan programs.
The combined revenue growth and G&A (General and Administrative Expenses) reduction resulted in a significantly improved EBITDA, highlighting the Company's progress in strengthening the core business before accounting for interest and taxes.

Capital Raising Activities:

During Fiscal 2024, the Company completed the issuance of 300 units of 12% non-convertible debentures, raising $300,000 in proceeds to support its growth initiatives.

Business Operations:

The MCA Program, which provides small businesses with access to working capital, continues to be the Company's core revenue driver. As of June 30, 2024, the Company had $5.1 million in transaction credits outstanding, down from $5.64 million as of June 30, 2023. The decrease was due to higher than expected delinquent accounts in March 2024 to the tune of $0.4 million, which the Company successfully navigated without significant disruption to its business.
The Company also renewed its agreement with Aeroplan, a subsidiary of Air Canada, extending the partnership until August 31, 2028. Under the agreement, merchants can continue offering Aeroplan points to their customers, increasing merchant loyalty and customer engagement.

The financial statements for fiscal 2024 together with management's discussion and analysis of these results have been filed on SEDAR.

Outlook:

The Company remains focused on capitalizing on the economic recovery following high-interest rates and inflationary pressures. Advantex continues to seek additional financing to support the expansion of its MCA program and other marketing initiatives. Despite the challenging environment, particularly for small businesses in the hospitality sector, the Company is optimistic about future growth, supported by its strategic partnerships and ongoing capital-raising efforts.

About Advantex:

Advantex is a leading provider of merchant cash advance services to small independent merchants across Canada. The Company also operates a partnership with Aeroplan, offering businesses the opportunity to provide Aeroplan points to their customers. Advantex is listed on the Canadian Securities Exchange under the symbol ADX.

Forward-Looking Information:

This news release contains certain "forward-looking information" within the meaning of applicable securities legislation. Forward-looking information includes, but is not limited to, the Company's future financial performance, business strategy, future financing, and its ability to meet obligations and achieve operational goals. The forward-looking information is based on current expectations and assumptions made by management in light of its experience and perception of historical trends, current conditions, and expected future developments. Forward-looking information is subject to known and unknown risks, uncertainties, and other factors that may cause actual results to differ materially from those anticipated or implied by such forward-looking information. These risks include, but are not limited to, general economic conditions, interest rates, inflation, the ability to raise additional financing, and risks related to the Company's business and operations.

The Company undertakes no obligation to update forward-looking information, except as required by law. Readers are encouraged to consult the Company's public filings for a full discussion of risks and uncertainties related to forward-looking information.

SOURCE Advantex Marketing International Inc.