RLG Reports $1.85M Q2 Revenue, 65% Margin Growth Over Four Quarters

Strong Revenue Growth Amid Strategic Expansion

RooLife Group Ltd (ASX: RLG) delivered a robust performance in the second quarter of fiscal 2025, with sales revenue soaring 144% quarter-on-quarter to $1.85 million (unaudited). This surge reflects the company’s aggressive rollout of its RLG Marketplace online stores across key international markets including China, Hong Kong, Australia, and India.

The company’s strategy to deepen its footprint in high-growth health and wellness sectors is paying dividends, as evidenced by a consistent improvement in gross profit margins over the past four quarters, culminating in a 65% increase since Q3 FY2024. This margin expansion aligns with RLG’s focus on higher-margin own-brand products, notably its VORA health supplement range.

Investing for Future Growth Despite Rising Costs

RLG’s Q2 results also reveal increased expenditure in product manufacturing and operating costs, rising to $1.05 million from $699,000 in the prior quarter. These costs are largely attributed to the global expansion of the RLG Marketplace platform, including the build and launch of new online stores and investments in India’s burgeoning market.

Advertising and marketing expenses climbed as the company sought to drive sales momentum across its expanding digital channels. Meanwhile, staff costs continued a downward trend, falling 45% over eight quarters to $473,000, reflecting disciplined cost management despite the company’s growth initiatives.

Capital Raising to Fuel Expansion

Post-quarter, on 30 January 2025, RooLife Group successfully completed a $900,000 placement to sophisticated investors, issuing 225 million new shares at $0.004 each, accompanied by listed options. The capital injection is earmarked for further development and production of RLG’s own food, health, and wellness products, alongside marketing and launching additional online stores globally.

This funding round underscores investor confidence in RLG’s growth trajectory and its ability to capitalize on the rapidly expanding Asian health and wellness markets, particularly in China and India, which are forecast to become the world’s largest consumer markets by 2029.

Expanding Product Range and Market Reach

During the quarter, RLG secured its maiden made-to-order milk powder sales to JD.com, China’s e-commerce giant, with an initial order valued at $200,000. This milestone highlights the company’s successful penetration into premium product segments and its strategy to leverage exclusive third-party and own-brand products to enhance margins.

Additionally, RLG showcased its portfolio at Cosmoprof in Mumbai, India, launching products on Reliance Retail’s JioMart platform. These moves position RLG to tap into India’s rapidly growing digital economy and rising middle-class demand for high-quality imported health products.

Outlook and Market Positioning

RLG’s integrated e-commerce platform offers a turnkey solution encompassing digital marketing, inventory management, logistics, and customer service across seven countries. With a $37 million sales base and a growing own-brand portfolio, the company is well-placed to scale in the high-growth Asian markets.

While the company’s cash position tightened to $636,000 at quarter-end, the recent capital raise and disciplined cost controls provide a runway of approximately 1.8 quarters of funding. Management remains confident in meeting business objectives, banking on the future benefits of current investments in product development and market expansion.