Quickflix founder downplays looming cashflow crisis and signals another capital raising
Langsford
The founder and CEO of struggling subscription video on demand (SVOD) service Quickflix has downplayed the risk that the company is running out of money and said it has seen an uptick in subscribers at the start of the year.
Yesterday’s half-year financial results showed the company had just $2.1m in the bank as of December 31, but had lost $8.6m in the previous six months, an average of $1.4m a month.
The results have raised questions over Quickflix’s future solvency with the interim report itself warning its “continuing viability” is dependent “upon the Group’s ability to continue to raise capital and form strategic alliances.”
Stephen Langsford CEO of Quickflix today told Mumbrella the company had moved to lower its costs and that much of its outstanding accounts had been restructured telling Mumbrella: “Yes we have cut costs as well restructured payable – a sizeable component is payable after 6 months.”
Asked if Quickflix would again seek to capital raise, after last year’s attempt to bring in $5.7m in a capital raising brought in just $650,000 from investors, Langsford responded: “Yes we’ll be securing additional capital.”
While the report shows subscriber numbers dropped from 122,862 in June 2014 to 117,106 at the end of December, Langsford insisted it had seen an uptick at the start of the year, with subscribers again over the 120,000 mark.
The report reads: “The continuing viability of the Group to continue as a going concern, meet its commitments as and when they fall due and to develop its customer base is dependent upon the Group’s ability to continue to capital raise and form strategic alliances.
“The directors are of the of the opinion that the Group entity will continue to obtain the additional capital… should capital raisings not materialise there is material uncertainty whether the consolidated entity will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business.”
Langsford declined to specify from where the troubled Australian SVOD would seek these funds but it comes less than a month after venture capital firm Cashel Capital Partners ceased to be a substantial investors in the company, a move which further weakened the Quickflix share price.
Late last year StreamCo, the parent company of rival Stan, took a $1m stake in Quickflix with redemption rights should the company face a “liquidation event”. Since then Quickflix’s share price has continued to slide.
The Quickflix share price was trading at $0.002 giving the company a $3.63m market capitalisation, down from $13m a year ago.
Nic Christensen
Quickflix charged me for “Pay-per-Play” content downloaded during a free trial even though the gift card clearly stated: “UNLIMITED streaming of movies and hit TV shows to your connected services.” And they capitalised “UNLIMITED”.
For weeks, Quickflix refused to reverse the unauthorised charges, primarily for content their dodgy platform could not stream at watchable speeds.
It was only after I referred Quickflix to their own terms & conditions, which clearly stated that pay-per-play was included in the unlimited free trial, did Quickflix agree to reverse the charges. It then amended its terms and conditions. No thanks for pointing out the inconsistency between their position and their stated terms or apology for the time they wasted.
So anyone thinking “UNLIMITED” means “without limit” might not have cause to complain anymore. Might.
So not only is Quickflix’s download service a waste of time, Quickflix’s complaints handling is inept, even after management involvement, having shown no regard for the inordinate amount of my time Quickflix wasted as a result of their incompetence in not knowing their own terms and conditions and being too self-centered to make a goodwill gesture and so having to be dragged to comply with their own terms and conditions.
In light of which, Quickflix’s share price and inability to raise the capital they seek come as no surprise.
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Quickflix plays a vital part of peoples entertainment in rural areas. Stuck on dial up, even with the billions spent on the new NBN we still won’t be able to even watch youtube as NBN will bypass our property and many many others as it’s to far from town to connect.
Quickflix has a huge range of DVD’s movies and tv series way cheaper than spending two hours driving to town and without it we would starve of entertainment.
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quickflix was pretty slow to send DVDs to me after return. Thought it was postage being slow, but either way it made the service pointless for me. I called to cancel and told them I would return the dvd that was on its way. The rep on the phone said not to worry about it. It never showed up as I assume it was never sent, a week after the previous was returned.
After buying a Sony tv with a free digital subscription, I thought I would give them another go. They didn’t humour it, so vowed never to deal with them. Happy Netflix customer ever since. Not surprised they are dying. Awful business practices.
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Ben Quickflix can’t survive on DVDs, it’s a dying medium as you can see in their percentage of usage graphs. It’s unfortunate for rural people but it’s simply the reaility of sustainability. Quickflix have indeed provided a great service in DVD rental in the past but it looks like that time is passing. There’s no profits in DVD service anymore.
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Investors would get a better return on their money feeding it to the great white shark trawling the east coast
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@Ben
You watch Quickflix over dial up?
Very fishy post.
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No, no one can watch quickflix in dial up, the point I was making that the DVD service is vital for rural areas, something we want to continue
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