Shares in junior classifieds company iCar Asia Ltd (ASX: ICQ) lifted today as management announced that the company had completed a record quarter, taking in its highest ever amount of cash receipts – up some 140% on the prior corresponding period last year.
The company announced that its Thailand operations were 'EBITDA profitable', meaning that this segment made money once interest, tax, depreciation and amortisation were excluded. Additionally, the Malaysian operations are successfully becoming monetised and management expects this segment to have its first EBITDA-profitable month in 2015.
This is a great sign, however, the company's balance sheet is still going backwards as group marketing and staff costs still far outweigh the marginal profitability of Thailand. This quarter, iCar burned $2.9 million in cash and ended the quarter with $21.51 million cash at bank.
Growing revenues are expected from both the Thai and Malaysian operations, although any setbacks or a slower than forecast rise in earnings could affect group plans to be profitable by the end of 2017. Australian equivalent, Carsales.Com Ltd (ASX: CAR), participated in iCar's recent capital raising and remains a significant holder in iCar, with 20.2% of total shares on issue.
Readers may have seen iCar mentioned in my recent article on the top three speculative stocks in my portfolio, and while I am not in the market for more shares right now I would be happy to buy iCar at today's prices.
