The Perth cycling technology company Cycliq has bolstered its margins by 17 per cent by cutting out distributors and changing its manufacturing model.

The firm is set to launch its new Fly6 and Fly12 rear and front camera and lights next week, off the back of record sales of $746,000 in the September quarter.

Cycliq spent $932,000 in the September quarter and is expected to spend a further $2.9 million by the end of the year.

The listed company, which began as a Kickstarter five years ago, has a market value of $13.3 million after closing down 10 per cent at 1.8¢ on Friday.

Cycliq chief executive Chris Singleton said the group’s manufacturing joint venture and a more streamlined approach to selling its products should result in positive cashflow in the near future.

In June the company signed a memorandum of understanding with Thompson and Kenneth Cheung, the Hong Kong-based team behind Glory Horse Industries, to form a joint venture, Cycliq Research and Development.

Mr Singleton said the partnership would allow Cycliq to vertically integrate its supply chain and have greater control over the cost of manufacturing its products.

He said before the joint venture, Cycliq would pay to get its products manufactured before it knew the cost of production.

“With the joint venture, we know what the cost of production and manufacturing is going to be, so our margins should increase significantly as a result and our use of capital should be better,” he said.

In the six months to October, Cycliq increased its margins from 22.6 per cent to 39.4 per cent.

Mr Singleton said the company’s decision to shift to a business-to-business model by cutting its ties with distributors including Australia’s FE Sports, had resulted in greater margins.

“When I came on in December, we did a 360 review of the company — we looked at the brand, the distribution, sales and manufacturing,” he said. “Our consumer research said that some people really wanted to purchase everything online, others really wanted to engage with retailers.

“We concentrated on getting online retailers that had a really good brand presence in their own right.”

Cycliq moved away from FE Sports early this year and shifted its product to websites including Wiggle, Bikebug, Pushys and 99 Bikes. Its online presence resulted in consumers asking for the product in bicycle stores, where Cycliq’s business-to-business model worked to allow bike shops to go straight to it.

The tech start-up has one distribution agreement remaining on its books with Madison in Britain. Its online presence boosted Cycliq’s global sales, with 80 per cent of its revenue in the last quarter coming from overseas.

Cycliq is working on a more affordable product range to be released next year.