Straker says he’s no fan of Ardern domestically - but ‘class act’ opened doors on US trade mission

Grant Straker on being part of M Jacinda Ardern's trade mission to the US: "Many of us have had our moments on domestic policy but without a doubt she is a superstar overseas." Photo / Michael Craig

Straker Translations' ASX-listed shares rose 5.7 per cent to A$1.20 after the firm reported a narrowed net loss, a jump in revenue, and guided to more gains in 2023.

"We've probably delivered the best possible result at the worst time given current market conditions for tech, but we are playing the long game so confident the market will get the message as we continue to deliver operationally," co-founder and chief executive Grant Straker told the Herald.

The Auckland maker of systems that use both AI and human translators saw revenue increase 78 per cent to $55.9 million for the year to March 31.

The result included the first full year of revenue from a marquee deal to supply translation services to IBM, which Straker called "transformative", plus a quarter's revenue from Belgium-based Idest - the latest in a string of acquisitions.

Straker's full-year net loss narrowed slightly from last year's $6.0m to $5.9m.

Ebitda losses narrowed to $0.1m from the year-ago $1.1m. Adjusted to exclude non-recurring acquisition costs, operating earnings were $0.2m vs a $0.2m loss last year.

Free cashflow was in the red, at -$5m (from the year-ago -$2.0m) for the full-year but eked into positive territory ($0.1m) in the second half. Straker put the first-half outflow down to costs associated with onboarding IBM.

After a A$25m raise in the first quarter, Straker finished the year with a $15.1m cash balance (vs the year-ago $7.2m) and no debt.

Amid continuing Covid uncertainty, the firm offered only broad-brush guidance. It forecast 20 per cent revenue growth in FY2023, and said it would be profitable on an adjusted ebitda basis (without specifying a range).

Star turn

The result came after a busy week for Grant Straker on the political front.

The chief executive was one of five tech entrepreneurs who joined Prime Minister Jacinda Ardern's trade mission to the US, which included meetings with Microsoft, Twitter and Amazon executives.

He was also named to the Government's new Startup Council, which will advise on policy for early-stage companies.

"The PM's trip was excellent," Straker told the Herald this morning.

"It opened up some great opportunities and she was a class act in the meetings we did with her.

"Many of us have had our moments on domestic policy but without a doubt she is a superstar overseas. She's well-connected to world business leaders and that is very good for NZ businesses with the doors she can open."

Straker said Ardern would meet with the delegation before events and meetings.

"She would ask what we wanted out of it and she would work the room and narrative to ensure we got what we needed out of the trip."

Key IBM deal

Straker Translations, founded by one-time paratrooper Straker and his wife Merryn in 1999, has long had a relationship with IBM, using the US company's AI platform and cloud computing service.

But it became a two-way street in 2020 when Straker acquired a Barcelona-based rival, MMS (one of seven acquisitions of small translation players), which supplied Spanish translation services to IBM.

In a new arrangement that kicked in from early 2021, Straker's RAY platform links directly to IBM's technology platforms to provide translation capabilities across 55 languages for Big Blue's Adaptive Translation Services.

Straker took on 40 new staff to handle the extra work involved with the IBM deal, and today has 264 employees.