Cash-crunched Quickflix appoints administrator
Quickflix has gone into voluntary administration, the company said in an ASX filing this afternoon.
Ferrier Hodgson – the company most recently known for overseeing Dick Smith's final days – has taken control.
The video streaming pioneer has struggled with a number of failed capital raising and partnership attempts over the past year as it has been hit by new competition from the launch of Netflix in Australasia, and new local competitors on both sides fo the Tasman.
The immediate cause of today's announcement was $11.7 million in redeemable preference shares (that is, shares that must be bought back by the company at an agreed date and for an agreed price).
The redeemable preference shares were once owned by (now departed) founding investor HBO and bought by Fairfax-Nine Entertainment joint venture Stan for an undisclosed sum. Whatever the sum is, Quickflix can't pay it.
Quickflix closed its Auckland office on April 5 as part of a round of cost-cutting measures.
The company's New Zealand operation has recently run email marketing campaigns offering its subscribers two months free on the Sky TV-owned Neon. Quickflix managing director Paddy Buckley (now working from home) says it is purely a marketing partnership rather than a precursor to Quickflix's local operation being absorbed into Neon.
For its December quarter, Quickflix reported an 8% reduction in paying subscribers to 91,817 across Australia and New Zealand. Revenue from customers and an R&D rebate totalled $A3.9 million, expenses $A4.1 million.
Quickflix NZ, which is a fully owned subsidiary of its Australian parent, is not in administration.
This afternoon, Mr Buckley told NBR, "It's business as usual here."
It is, if not perhaps in the way the MD intends.