iPlayCO Corp Ltd (CVE:IPC) is looking to the future with optimism and an increase in sales, notably in Europe, after what it called an "investment year".
The children's play equipment specialist reported results for the year to September 30 on Wednesday, saying it had taken steps during the fourth quarter towards realizing triple-digit percentage growth in its European sales within the next two years.
What does iplayCO do?
The firm, headquartered in British Columbia, over the last 19 years, and public since 2003, has sold over 3,000 playgrounds to more than 60 countries worldwide.
iPlayCO, which has well over 100 employees, sells its play structures all over, including family entertainment centres, as well as to restaurants, museums, hospitals, hotels and airports.
It is also now launching new product lines, including trampoline parks, which complement its soft play parks.
Late last year, the firm bought the brands from three companies, which allowed it to make the big launch into Europe, and from which it is poised to reap big rewards.
iPlayCO will ultimately own the IP rights to the Play Mart and Play Planet brands, as well as the Play Planet line of business.
As Max Liszkowski, the finance chief at Iplayco, recently explained to Proactive: "It was certainly an investment year."
"We had to put a manufacturing facility together and hire a whole bunch of employees and train them." He added though: "The European operations have secured over €4mln of sales contracts so we are very pleased with that."
Results don't show the whole picture
The company reported encouraging moves on sales, which increased by 61.1% to more than $3.7 million in the fourth quarter from $2.3 million in the previous quarter.
"While annual sales declined, and we incurred a loss in 2018 due primarily to set-up costs for our new operations in Europe, we have substantially completed our start-up activities there and anticipate margins to improve in 2019," said iPlayCO CEO Scott Forbes in the regulatory release.
"We also anticipate a significant increase in sales in 2019 as compared to 2018 from strong contributions by our operations in North America, Europe and Asia," said Forbes.
As a result of the aggressive push into Europe, the company said it lost $1.1 million in fiscal 2018 compared with net income of $661,506 or $0.03 per share a year ago.
However, the group highlighted that sales were "expected to increase significantly" for the year ending September 30, 2019.
iPlayCO buys back 51% of shares from controlling shareholder
The negotiated share buy-back program this summer with FAS Entertainment B.C. Ltd, Saudi FAS Holding Company and Billy Games Company Ltd has bolstered iPlayCO shareholders and also effectively cut its share count by half.
Billy Beez family entertainment centres were four years ago, the group's largest customer, which it built playgrounds for, and when they (Billy Beez) wanted to expand, they capitalized the firm via a placing and secured supply. They bought over $20 million in products from iPlayCO until they hit capital constraints and couldn’t continue, and the share buyback was agreed.
IPlayCO purchased and cancelled 10.65 million of its shares.
The acquired shares represented FAS's entire ownership position in iPlayCO and constituted 51.03% of all iPlayCO shares issued and outstanding prior to their cancellation.
In connection with the closing of the purchase agreement, Sultan Alhokair, Muhanad Awad, Shad Azimi, Zaher Fattouh and Shaun Kriel, who were each nominee directors of FAS, resigned from the iPlayCO board.
And in November, it hired Beth Baker and Patrick Parker as independent directors.
Baker is the president and co-founder of Capital Assist Inc, a professional services advisory firm in Toronto and has over 20 years' experience in strategic leadership, operational management, team building and communications.
Meanwhile, Parker is a customer-focused and strategic business leader with significant experience in retail, franchising and foodservice.
The share price
Its shares in Toronto have had a good run of late, advancing more than 14.7% over the last month to stand at $0.70 each.