22nd Dec 2015
RapidCloud International plc (AIM: RCI), the computing services, web-hosting and web-solutions provider based in Southeast Asia, announces its trading update for the 12-month period to 31 December 2015.
The Company now expects revenues to be similar to the revenues achieved by the Company in the financial year ended 31 December 2014. This is below market expectations.
Anticipated growth in revenue was curtailed by a number of factors. In Malaysia, the implementation of the new goods and services tax ("GST") during the year had the effect that many businesses prioritised their operations into solving GST implementation and compliance issues as opposed to further investment in IT. This also contributed to a more general weakening in the Malaysian economy where the drop in global oil prices have also affected the industry and country as a whole. In Singapore, our growth was also slower than anticipated and the more recently established Indonesian operation has taken longer than expected to become established.
During the course of the year, the Company has invested in both its products and also its infrastructure to support its anticipated growth. These projects have inevitably had an associated cost and this, combined with a lower than expected level of revenue in the course of the year, will mean that profits will be materially lower than both market expectations and the levels of profitability achieved in the financial year ended 31 December 2014.
Notwithstanding the above, the balance sheet remains strong with net cash, as of 30 November 2015, of RM8.6 million.
The Company is encouraged by new tendering opportunities which it is being invited to participate in, particularly of a larger scale. Furthermore, the Company has also received positive feedback for its new product developments and expect these to contribute to growth in the business in 2016.
Raymond Chee, Managing Director of RapidCloud commented: "Whilst the period under review was challenging, we believe the Company is now well placed to return to meaningful growth in 2016. All the directors are committed to delivering shareholder value and demonstrated this by electing to receive the scrip dividend earlier in the year.
"The economic environments in which we operate appear to be improving and we believe our enhanced product and services suite is well placed to capitalise on any growth in our target markets. Management is therefore confident 2016 will be a much more positive year for the Company."
For further information, please visit www.rapidcloudasia.com or contact:
|RapidCloud International Plc
Raymond Chee, Managing Director
David Cotterell, Chairman
|WH Ireland, Nominated Adviser and Broker
|Tel: +44 (0)20 7220 1666|
|Walbrook, Financial PR and IR
|Tel: 44 (0)20 7933 8792
RapidCloud, provides computing services, web-hosting and proprietary web-solutions, such as web-site building and e-commerce solutions. The Company is based in Southeast Asia and is one of the few solutions providers in the region to deliver its offerings through all three available Cloud Computing segments, i.e. Software-as-a-Service, Infrastructure-as-a-Service and Platform-as-a-Service.
Formed in 1999 the Company has a well-established cloud offering with a customer base of over 42,000. These are predominantly SMEs but also include blue-chip clients such as Deloitte, BAE Systems and Canon, for which RapidCloud's extensive R&D department creates bespoke software solutions.
RapidCloud currently has operations in Malaysia, Indonesia, Singapore, Thailand and the Philippines. According to industry research commissioned by RapidCloud from Frost & Sullivan in 2013, the Cloud Computing industry in Asia Pacific is expected to grow at a CAGR of 49.6% between 2013 and 2015, giving a market size of US45.6 billion by 2015. RapidCloud International plc was admitted to AIM on 14 August 2013. For further information, please visit www.rapidcloudasia.com