The TASK Group Holdings Ltd (ASX: TSK) share price is lighting up today after the ASX tech share released its interim FY23 results and upgraded guidance.
In early afternoon trade, the TASK share price has raced 35.7% higher to 38 cents.
The group formerly traded as Plexure (ASX: PX1), a mobile engagement software company behind the MyMacca's mobile app.
But in late 2021, Plexure made a $120 million play for TASK, a transaction management platform for enterprise clients across food service companies, stadiums, and casinos.
TASK's platform takes care of everything from point of sale and online ordering to loyalty, mobile apps, and other engagement products, all on a single technology stack.
Its customer base includes the likes of Starbucks Australia, Guzman Y Gomez, Retail Food Group Limited (ASX: RFG), Crown Casino, and Marvel Stadium.
Last month, the merged group changed its name and ticker code to reflect the completion of its business transformation.
And today, this group has handed in its interim results for the six months ended 30 September 2022. Let's take a look.
Up to the task
Starting with the topline, the group delivered total revenue of NZ$26.6 million. This represents a whopping 97% growth over the pre-merger period of 1H22, but it includes the contribution from TASK.
TASK generated revenue of NZ$9.6 million during the half, an increase of 50% on 2H22.
The Plexure division achieved the remaining NZ$17 million of revenue, up 26% on 1H22, reflecting increased user numbers and customer engagement.
Notably, the Plexure division was cashflow positive during the half, aided by a 25% reduction in staff costs on the back of the business restructuring undertaken in FY22.
Before the merger, Plexure was operating at a loss. But it's now added a profitable TASK to the fray, helping to improve the earnings of the combined group.
In the most recent half, the group achieved positive adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) of NZ$2 million. This is a marked turnaround from the adjusted EBITDA loss of NZ$7 million in the prior period.
On the bottom line, the group posted a net loss after tax of NZ$4.6 million, a 46% improvement on the prior period. This was driven by the contribution from TASK, along with benefits from the restructuring of the Plexure division.
The group boasts a debt-free balance sheet with NZ$24.2 million of cash at its disposal.
It achieved positive operating cash flows of NZ$10.1 million during the half, a dramatic improvement from outflows of NZ$7.8 million in the prior period.
At the same time, the group's deferred revenue increased from NZ$9.8 million to NZ$22.1 million.
Management commentary
Commenting on the results, TASK CEO Dan Houden said:
The strong growth in revenue and turnaround in profitability we have delivered this half is testament to team's progress in transforming the business.
The results demonstrate the merged Group's turnaround following a corporate restructuring of the Plexure division in FY22 and the renegotiated contracts with McDonald's on 1 August 2022, as well as increased customer demand across both divisions.
Earnings guidance receives big boost
Pleasingly for shareholders, TASK has upgraded its FY23 guidance.
It's now expecting total revenue of between NZ$59 million and NZ$62 million compared to prior guidance of NZ$56 million.
Adjusted EBITDA is also expected to come in between NZ$8.5 million and NZ$9.5 million, a stellar improvement from prior guidance of NZ$3.7 million.
This has been driven by the group's strong first-half results and management's confidence in the impact of new terms with McDonald's and other contracts executed throughout 1H23.
In August, Plexure entered into new agreements with its largest customer, McDonald's.
Under the new deal, Plexure will continue to provide its platform to McDonald's over the next five years, for net positive cash flow per annum, subject to operational performance. This compares to previous losses from the Plexure division.
TASK share price snapshot
Even after today's meteoric rise, TASK is still a minnow in the ASX tech space, currently commanding a market capitalisation of around $135 million.
Shareholders will be hoping the TASK merger will be the impetus of a sustained turnaround after the Plexure business faced a rocky start to listed life on the ASX.
So far, it's been delivering. The TASK share price has rocketed 81% over the last six months. But it's still down 67% since listing on the ASX at the end of 2020.
