QUICKFLIX LIMITED
Subscriber Growth Continues
QFX - Full Year Results - Mr Simon Hodge, Managing Director
Mon, 1 Sep 2008 11:30AM
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Mr Simon Hodge
Mon, 1 Sep 2008
11:30AM Australia/NSW
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QUICKFLIX LIMITED (QFX)
ASX code: QFX
Website: http://www.quickflix.com.au/
Industry: Retailing
Principal Activities:
On-line DVD rental
Address:
178 St George's Terrace, Level 4
PERTH
WA
Phone: 1300 138 644
Fax: (08) 9347 4901
Executives & Directors
Mr Kevin Campbell , Non Exec. Chairman
Mr Simon Hodge , Managing Director, Chief Op. Officer
Mr Stephen Langsford , Executive Director
Mr Jon Schahinger , Non Exec. Director
Mr Jeremy Loftus , CFO
Ms Susan Patricia Hunter , Company Secretary
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Company ASX Announcements
Company ASX announcements can be viewed on the ASX website.
Announcements from the preceding six months are shown below.
Please refer to the relevant stock exchange if any of the above information is incorrect
QUICKFLIX LIMITED (QFX) Events
Australia/NSW
QUICKFLIX LIMITED (QFX)
| Results of the AGM | Fri, 21 Nov 2008 |
| Legal Online Movie Rental Offers Alternative To Piracy | Fri, 21 Nov 2008 |
| 2008 AGM Presentation | Fri, 21 Nov 2008 |
| Quickflix Top Titles from October 2008 | Thu, 20 Nov 2008 |
| Amended Quarterly Overview September 2008 | Wed, 5 Nov 2008 |
| Quarterly Overview and Appendix 4C September 2008 | Tue, 21 Oct 2008 |
| Quickflix Top Titles from September 2008 | Thu, 16 Oct 2008 |
| 2008 Annual Report | Tue, 14 Oct 2008 |
| Notice of 2008 Annual General Meeting | Tue, 14 Oct 2008 |
| Quickflix Top Titles from August 2008 | Thu, 11 Sep 2008 |
Please note: This company appears on this website as a result of its listing on the Australian Securities Exchange. Boardroom Radio does not claim any association with any company listed on this site.
INTERVIEW WITH SIMON HODGE, MANAGING DIRECTOR OF QUICKFLIX LIMITED (QFX)
“Full Year Results”
http://www.brr.com.au/event/50502
MONDAY, SEPTEMBER 1, 2008, 11:30 AM
BRR Today on Boardroom Radio, we’re joined by Mr. Simon Hodge, the Managing Director of Quickflix.
10
Simon, great to have you on Boardroom Radio.
QFX Thanks, Joel. It’s good to be here.
15 BRR Yes, Simon, of course, we’re talking about your results which were released
to the market. It’s a good year for Quickflix. Would you like to touch on some of the highlights for us?
QFX Yes. Sure, Joel. During the year, we made significant progress in advancing
20 our position as a leading pioneer emerging online entertainment market in Australia. Quickflix achieved, you know, a very strong growth and at the same time, we made some really good improvements to both of our service levels and our infrastructures and now brand awareness.
25 Some of the key highlights in the results: We had revenue up 68% to $5.7 million. Our paying subscriber base grew to more than 25,000, that’s an increased of 65% or 10,000 net new subscribers in the year.
Our net loss for the year was $4.3 million which was up slightly on the
30 previous year and this reflected the increased investments we made in marketing, expanding the DVD library, and also developing our operating infrastructure to both improved service levels and also to accommodate the growth that we’ve been seen.
35 The investment was focused largely in the first half of the year and we’ve already seen the benefits impact the results for the second half. Our reported net loss has had from $2.9 million in the past half of the year to $1.4 million in the second half. Over this time, we increased our revenue by 24% and reduced our costs by 79%, so the trends are very positive.
40
As we reported last month in our quarterly cash flow, we’ve achieved a significant financial milestone with our first cash flow positive month in June that demonstrates that Quickflix, you know, with over 25,000 subscribers and more than $0.5 million of recurring monthly revenue, now has sufficient scale
45 to be cash flow positive if we would’ve slow our investment in new subscribers growth as we did during the quarter.
That said our focus is very much to continue growing this business and we will invest to make the most of the opportunity that’s ahead of us.
BRR You’ve touched on the service levels and the growth in subscriber numbers there, customer service has always been a big thing for Quickflix, you told about the Quickflix experience, have you gone in terms of your churn rate this year
5 and what does that mean for the business going forward?
QFX Yes. We’ve had some great gains in churn. Our cancellation or churn rate dropped by 35% in the financial year compared to 2007 and that averaged to 5.7% per month over the year. So, we’re very pleased with that outcome.
10 That’s a result of investment across the number of areas where we’ve looked to keep our subscribers happy. It’s very important to keep your subscribers happy particularly as you grow satisfied customers, obviously, will stay with you longer and also they, some more likely to recommend the services to their friends particularly with the new service like Quickflix, it’s really important
15 to have that growing base of happy customers. We’ve now got over 25,000 of them, and they can generate a lot of noise or a lot of positive word-of-mouth referrals, and that’s the key to driving growth.
Some of things were done to foster that we’ve invested $1.5 million
20 increasing the size of our DVD library by 65% to support the growth and that’s given us the benefits of the greater sort of ranging choice and the ability to meet the subscribers’ needs particularly across the long tail of content that we make available. We’ve improved the layout and performance of our website and that really makes it easy for our customers to find great movies to watch.
25 You’ve got a video content into the website and included a large library of movie trailers. Again, another sort of feature for our members.
Our operating infrastructures, we’ve expanded and upgraded -- that’s the key to make sure that we can get the right movies to the right customers at the
30 right time, and also to ensure that we can get the cost savings from this scale of economies as we grow. We’ve also invested quite a lot in improving our and getting our brands more well known at that all helps with the customer satisfaction and getting them to stick around.
35 BRR We’re just gone through a reporting season where a lot of see, as an MD, have been putting fairly gloomy outlook on the year ahead. I mean, we’re certainly in turbulent economic times, for want of a better word. What’s the outlook for Quickflix and how it has been performing in these uncertain times?
40 QFX Yes, sure. It looks, I think, as the business in general is in really good shape. Looking into 2009, I think we’ve got a great brand, great products, and we’ve got significant subscriber base to kick the year off. The economic conditions are pretty tough out there. For consumers, there are high fuel prices, interest rates, and just generally costs of living are on the rise. We feel that that’s
45 driving a lot of consumers to look at more, sort of, stay-at-home type entertainment services to reduce on the entertainment or leisure expenses, and services like Quickflix with, yeah, competitive prices, flexible subscription plans can deliver entertainment to the home, and lined up along side services such as Foxtel, I think we’ve got a pretty good and competitive offering.
Moving forward, you know, in 2009 there’s a number of new marketing partnerships that we’re currently working on that will book to launch that will get Quickflix’s brand and service in front of more Australians. We’ve got a
5 very clear marketing strategy and a budget to grow our subscriber base quickly and cost effectively over the next year, and we’re looking to continue on the momentum that we’ve achieved in 2008.
BRR Finally Simon, we’ve been hearing a lot of hype about online movie
10 downloads. It’s mainly coming from the US, but it’s also being raised over here. In the context to the Australian market, is it realistic at the moment or are we still away off getting to practical online movie downloads?
QFX Yes. I think, digital download or video on demand that sort of comes down
15 under a number of different names as being talked about for sometime and we’ve seen a few players come and go in this market place and particularly in recent times, I think there’s been an increasing amount of noise with EyeScene launching their service in the US market. Look, we see download deliveries a very exciting and emerging opportunity and it would be a part of
20 Quickflix’s service in future. We do need to take this in perspective, however, I mean, despite all the hard download volumes are relatively miniscule in this scheme of things like how for less than half of percent of all movie rental purchases and download transactions in the North America, for example DVD, is and it will continue to be the preferred format of choice for some time
25 yet.
Our immediate focus at Quickflix is to continue building our online movie subscriber base utilizing the DVD distribution model and a download model will be out in the future in demand and the economics justified.
30
BRR Simon, thanks for those comments. Congratulations on another great year of Quickflix and we look forward to catching up again soon.
QFX Thanks very much, Joel.
35 BRR Now remember, if you have any questions to Simon about this webcast or about Quickflix generally, please send through an email, the address is brr@brr.com.au, and we’ll pass it on to the company. Otherwise, you can use the Contact Us button on the BRR homepage.
40 Thank you for listening.
INTERVIEW CONCLUDED
Contact brr@brr.com.au for more information
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