Cluey : June 2022 Quarterly Activities Report & Appendix 4C

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ASX Announcement

27 July 2022

Cluey June 2022 Quarterly Activities Report and Appendix 4C

Cluey Ltd (ASX: CLU) ("Cluey" or the "Company") is pleased to release its Appendix 4C Quarterly Cashflow Report and Quarterly Activities Report for the quarter ending 30 June 2022 ("Q4FY22").

Highlights

• Significant growth across all key Group1 metrics

1. Revenue +80% compared to the prior corresponding period ("Q4 FY21") ('PCP')

1. Gross Profit +65% on PCP

1. Cash Receipts from Customers +81% on PCP o New Students +100% on PCP
   o Student Sessions +83% on PCP
   o Variable CAC per New Student -34% (improvement) on PCP

Growth and improvement in all key metrics - Q4 FY22

Cluey Group (Consolidated) - Q4 FY22

Revenue2	Gross Profit2
$10.0m	$5.2m
+80% on PCP	+65% on PCP
Cash Receipts from Customers3	New Students
$11.3m	11,494
+81% on PCP	+100% on PCP
Student Sessions4	Variable CAC5 per New Student
161k	$362
+83% on PCP	-34% on PCP

1. The Group includes Cluey Learning (Australia and New Zealand) and Code Camp (Australia and United Kingdom). Code Camp was acquired on 1 October 2021 and is therefore not included in the PCP comparison metrics.
2. Revenue and gross profit amounts disclosed are unaudited.
3. Inclusive of GST.
4. Includes attendance days at Code Camp after-school and school holiday programs.
5. Variable CAC (customer acquisition costs) per student is a non-IFRS measure used for management purposes which represents variable acquisition expenditure for a period divided by new students. The metric in the table above is consolidated and includes both Cluey Learning and Code Camp. New students for Cluey Learning are those students that had a session in the period, whilst New Students for Code Camp are those students that enrolled in the period. Variable acquisition expenditure is calculated based on total marketing expenses and brand investment, plus learning advisor (sales) employment costs and commission (included in employee benefits expense).

Cluey Ltd

ABN: 65 644 675 909

Suite 2, Level 2, 117 Clarence Street

Sydney NSW 2000

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Cluey Learning - Q4 FY22

• Australia - continued to see significant growth and demand for its services in Q4FY22, acquiring 7,431 new students, +29% on the PCP.
• New senior secondary subjects launched in February (Biology and Physics). Positive early signs with a total of over 2,500 sessions in these subjects completed in Q4FY22, an increase of 160% on the previous quarter.
• Improved retention rates (customer churn in Q4FY22 was 6.6% better than the PCP) delivered gains in customer lifetime revenue and lifetime value. This is despite a return to normal post COVID schooling, noting an increase in the proportion of students choosing to pause sessions during school holidays and pausing for longer.
• Variable CAC per New Student - improved by 5% on PCP (Australia and NZ consolidated).
• Gross profit margin of 52% impacted by several factors and expected to increase to ~55% in FY23:
  o Increased discounting - supporting customer reactivation and retention. This strategy has helped the improvement in retention and lifetime value mentioned above. Early stage friction in the transition to the new billing system resulted in some additional discounted sessions provided to impacted customers during the transition.
  o Faster than expected growth in NZ students due to planned pricing strategies aimed at boosting market penetration resulting in a larger than expected deployment of higher priced Australian tutors.
  o Reduction in the proportion of Small Group sessions.
  o Price increases (the first in two years for core service) deferred from start of the academic year (January 2022) to the start of the financial year (July 2022). Price increases announced to parents in June 2022 amounting to 6.25% for 1:1 sessions (from $80 to $85) and 20% for Small Group sessions (from $50 to $60), effective from 1 July 2022.
• New Zealand (NZ) - following pilot launch into NZ in Q2FY22, Cluey continues to ramp up investment to pursue the NZ market growth opportunity. In Q4FY22, 706 new students were acquired at a lower CAC than Australia. In Q4FY22, NZ students completed over 6,000 sessions, an increase of 203% on the previous quarter.

Code Camp6 - Q4 FY22

• After-schoolprograms in term 2 (Q4FY22) were delivered at 70 venues. This compared to 59 venues in term 1 (Q3FY22) - an increase of ~19% on the previous quarter. Based on current enrolments, this is expected to increase further to 80 schools in term 3 (Q1FY23) - a further increase of ~14%.
• Easter Holiday camps (Q4FY22) were held at 86 venues. This compared to 79 venues in the summer holidays (Q3FY22) - an increase of ~9% on the previous quarter.
• Following strong enrolments in Q4FY22, winter school holiday camps were held at 101 venues in Q1FY23 - an increase of 17% on the previous quarter.
• 4,063 new students enrolled in Code Camp programs in Q4FY22, an increase of
  70% on the previous quarter, at a Variable CAC per New Student7 consistent with the previous quarter.
• United Kingdom (UK) - in Q4FY22 the pilot was extended and expanded for after- school programs. This delivered $57,000 (AUD) revenue from 27 school locations.

1. Code Camp was acquired on 1 October 2021. Comparisons provided are to the previous quarter ("Q3FY22") as the company was not owned by Cluey Ltd in the PCP.
2. New Students for Code Camp are those students that enrolled in the period.

Cluey Ltd

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Quarterly Cashflow Report

The Appendix 4C Quarterly Cashflow Report for Q4FY22 is attached.

Operating activities

In the quarter, Cluey continued to provide personalised online tutoring and educational support to Australian and New Zealand school students as well as co-curricular online, in-person school holiday camps and after-school programs through its Code Camp subsidiary to Australian and United Kingdom school students.

Significant cash receipts and payments (inclusive of GST where applicable) disclosed in the Appendix 4C include the following:

• Cash receipts from customers of $11.3 million in the quarter, representing growth of 81% on cash receipts of $6.2 million in the PCP.
• Cash payments for advertising and marketing (including prepayments) in the quarter of $3.6 million, increased by 8% on $3.4 million in the PCP.
• Cash payments to staff, teachers and tutors disclosed in cash flow from operating activities in the quarter of $9.9 million increased by 85% on $5.3 million in the PCP.
• An additional $0.3 million of cash payments to staff involved in the further development of content and technology platform intangible assets are disclosed in cash flow from investing activities ($0.4 million in the PCP).

Total cash on hand as of 30 June 2022 was $24 million.

Use of funds - IPO capital raise $30m

The Company prepared the Prospectus in October 2020 in relation to the offer of 25.1 million shares at an issue price of $1.20 per share to raise $30 million.

In Section 1.8 of the Prospectus, the Company provided a statement detailing the proposed use of these funds. The table below shows the use of funds from the date of admission to the ASX.

Use of funds	Proposed per	Actual expenditure	Commentary
	Prospectus	8/12/20 to 30/6/22
	$m	$m
Sales & Marketing	10.9	10.9	In line with expectations
Product, Customer	5.8	5.8	In line with expectations
Care, Education &
Technology
Expenses	3.4	3.3	In line with expectations -
associated with the			noting that IPO costs include
IPO / Capital raise			those incurred prior to
			8/12/20
Working Capital	9.9	10.0	In line with expectations
Total	30.0	30.0

Cluey Ltd

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Payments to Directors and Related Parties

During the quarter, the following payments to Directors and Related Parties were made:

• $193,000 included in cashflows from operating activities. These payments were to Executive Directors for gross salary, fees, and expense reimbursements, and to Non- Executive Directors for fees.

_________________________

ENDS

Authorised for release to the ASX by the Board of Cluey Ltd.

For enquiries please contact:
Investors
Mark Rohald	Greg Fordred
CEO	CFO & Company Secretary
[e-mail]	[e-mail]

ABOUT CLUEY

Cluey is an innovative, ASX-listed Edtech company that combines education, technology and data to deliver quality education outcomes and an enhanced experience for students. Cluey has a highly experienced management team and Board with a track record of building successful education businesses and is supported by an Independent Education Advisory Board comprising four eminent independent education sector thought leaders.

Cluey key facts:

• Cluey provides curriculum aligned academic support for students in Australia and New Zealand. In addition, Cluey delivers co-curricular online, holiday camps and after school programs in Australia and the United Kingdom through its wholly owned subsidiary, Code Camp.
• Cluey is headquartered in Sydney.
• Cluey has been recognised in the prestigious HolonIQ inaugural list of most innovative Edtech companies in Australia. Cluey was also the winner of the 2021 Technology Scale-up Edtech of the Year Award and recognised as the 5th fastest growing technology company in Australia in the Deloitte Technology Fast 50 2021 Awards.

Cluey Ltd

Cluey Ltd

ASX: CLU

Appendix 4C

Quarterly cashflow report for entities

subject to Listing Rule 4.7B

For personal use only

Name of entity

Cluey Ltd

ABN	Quarter ended ("current quarter")
65 644 675 909	30 June 2022
Consolidated statement of cash flows	Current quarter	Year to date
		(12 months)
	$A'000	$A'000

1. Cash flows from operating activities

1.1	Receipts from customers	11,276	38,242
1.2	Payments for:	0	0
	(a) research and development	0	0
	(b) product manufacturing and operating costs	0	0
	(c) advertising and marketing	(3,645)	(11,953)
	(d) leased assets	(128)	(397)
	(e) staff costs1	(9,884)	(33,545)
	(f) administration and corporate costs	(2,366)	(8,099)
1.3	Dividends received	0	0
1.4	Interest received	19	75
1.5	Interest and other costs of finance paid	0	0
1.6	Income taxes paid	0	(14)
1.7	Government grants and tax incentives	381	444
1.8	Other (provide details if material) - Acquisition related costs	0	(224)
1.9	Net cash from / (used) operating activities	(4,347)	(15,471)

1 Staff costs (item 1.2( e)) include payments to employees, teachers and tutors for their service in the provision of learning support services, and excludes staff costs capitalised and shown in investing activities cash flows

2. Cash flows from investing activities

2.1 Payments to acquire or for:

	(a) entities - net of cash acquired	0	58
	(b) businesses	0	0
	(c) property, plant and equipment	0	(232)
	(d) investments	0	0
	(e) intellectual property2	(481)	(2,003)
	(f) other non-current assets	0	(158)
2.2	Proceeds from disposal of:	0	0
	(a) entities	0	0
	(b) businesses	0	0
	(c) property, plant and equipment	0	0
	(d) investments	0	0
	(e) intellectual property	0	0
	(f) other non-current assets	0	0
2.3	Cash flows from loans to other entities	0	0
2.4	Dividends received	0	0
2.5	Other (provide details if material)	50	50
2.6	Net cash from / (used in) investing activities	(431)	(2,285)

• Payments to acquire intellectual property (item 2.1(e)) includes staff costs capitalised as intangible assets ($296k in the quarter and $1,388k in the YTD)