Shares of Catapult Group International Ltd (ASX: CAT) have risen nearly 3% today to trade at $1.40 after the technology business released its earnings results for the full-year ended 30 June 2015.
Given that it only listed its shares on the ASX late last year and has a market value of just $58 million, Catapult Group is hardly your household name, yet it has the potential to generate fantastic returns in the coming years.
Catapult is a global sports analytics business that provides technology used to track the performance of athletes around the world, whilst also determining the players' risk of injury and responses to rehabilitation. Indeed, if you follow AFL, soccer, NRL, NBA, or even cricket, there's a good chance that you've seen your favourite players wearing one of Catapult's devices during training with the company reporting that its products have been used by more than 700 sports teams or organisations to date.
During the 12-month reporting period, Catapult exceeded its prospectus forecasts for revenue by a considerable amount with unit sales exceeding prospectus forecasts by 24% and revenue from subscription sales up 168% on the prior year to $5.1 million. Higher subscriptions are excellent for the business as it helps to ensure a higher rate of recurring revenue which will make each customer more valuable to the business (that is, a higher average revenue per user).
Source: Company report
Overall, group sales rose 49% on the 2014 financial year to $11.8 million, although it did record a heavier loss than last year. Such a result is to be expected for a technology company so early in its growth stage with the company investing heavily in sales and marketing to ensure its long-term success.
Although Catapult's shares have skyrocketed almost 140% since their time of inception onto the ASX in December last year, the stock could still be an excellent prospect for investors focused on the long term. While the shares mightn't be cheap, sales are growing stronger than the market anticipated and that trend could certainly continue into the future.
