Shares in international design marketplace Redbubble surged 45% yesterday after it revealed it had earned its first full-year operating profit since its 2016 IPO.
The surge took the shares to $1.46 cents, the day’s high, where they closed. That was 13 cents above the IPO price back in 2016 of $1.33 a share.
But the languishing Australian dollar hit the company hard, depressing the result.
Still the overall result is encouraging for the company as revenues jumped a solid 40% to $307 million and gross earnings were up 48% at $94.5 million.
Operating earnings before interest, tax, depreciation, and amortisation (EBITDA) were in the black for the first time since the company’s listing, at $3.8 million compared to a loss of the same amount in the year prior. That was a real turnaround.
But because of the company’s global footprint and widespread use of foreign currencies, the weakness of the Aussie dollar in the past year (and especially so far in 2019) saw the company incur an EBITDA loss of $3.5 million.
Over 90 percent of Redbubble’s revenue is sourced in currencies other than Australian, and the company blamed gains and losses in those currencies for the 105% increase in other expenses for the 2019 financial year.
Other expenses also included the $1.2 million acquisition of US t-shirt design company TeePublic it completed in November, which made a better-than-expected contribution to the business’ total revenue. In the eight months since its acquisition, TeePublic contributed $38 million to Redbubble’s revenue on a constant currency basis, up 41%.
