AFTER going through hurdles as a start-up in its first five years, iCreate Limited is shifting its operations to diversify itself from just educational training to other business ventures, including real estate and content creation.

This was revealed by president and CEO of iCreate, Tyrone Wilson at the company’s annual general meeting held last week at the AC Hotel Kingston in St Andrew. Prior to the pandemic, iCreate was solely focused on training individuals in the growing digital media space to meet the career needs of the digitally oriented future. The company has trained more than 4,500 persons and offers over 200 courses now which are internationally certified. iCreate became a publicly listed company in February 2019 and raised $55.32 million in equity capital.

“We gave a report on the company and ways in which we’re going to pivot and grow coming out of the [novel coronavirus] pandemic. This will slightly change our vision. We have expanded the scope of iCreate Limited, with the institute now being a division of the company. Our vision is fuelling the creative company,” stated Wilson.

In his presentation to shareholders, Wilson revealed that the company has closed its physical offices and is now focused solely on digital delivery of content for the iCreate Institute. This was in a bid to contain expenses which exceeded gross profit in its 2020, 2019 and 2018 financial years. Though revenue decreased by 32 per cent to $31.83 million for the nine months up to September 2021, the company generated a net profit of $3.87 million compared to a net loss of $2.26 million. For 2022 and beyond, iCreate is targeting US$2 million in revenue and at least US$1 million in net profit.

“We’ve been making some changes…We have minimum guarantee contracts as it relates to salaries. Our expenses are very low now as we have no physical office. In 2019, when we earned $48 million in revenue, our expenses were $60 million. Rent, electricity and telephone expenses were $2 million per month before we did anything,” Wilson explained.

iCreate plans acquisitions later this year. It completed the acquisition of e-commerce company Mobile Edge in 2021 and will be looking to close out the acquisition of an advertising company in 2022. Though he couldn’t discuss the target, Wilson revealed that it earned US$1 million ($155 million) in revenue, had a 30 – 35 per cent profit margin, and $75 million in free cash flow. iCreate also plans to acquire the rights to Reggae Sunsplash from the Guardsman Group.

Wilson said the owner of the business wants to exit and that iCreate has sent a letter of intent to acquire and is waiting on due diligence to be completed. The acquisition will be a leveraged buyout which will be mainly funded through debt and partially through equity. Though there was a discussion of $55 million through a rights issue, Wilson noted that the target is now $70 million to be executed later in the year.

Despite the company being in a tough position regarding cash flow, Wilson reminded shareholders that debt from Kyntire Holdings and Dequity Capital Fund Managers Limited was converted to Class A preference shares at the company’s recent extraordinary general meeting. This has shifted part of the company’s balance sheet to reduce the debt on the books. iCreate had $40.12 million in total assets and $63.24 million in total liabilities at the end of September.

When asked about the company’s corporate governance and executive management retention, Wilson noted that the company is in a better place and even added Ivan Carter to the board of directors and appointed him as chairman of the audit committee. Carter is the former chief financial officer of Sagicor Group Jamaica Limited and is the current Group CEO of Delta Capital Partners. iCreate also added several new executives including Declan Tully, Leighton Campbell, Randy Mattis and Dwight Burchell. The company published its nine-month financials last month but the JSE has removed the financials as it awaits additional information from iCreate.