Eroad first-quarter trading in line with expectations, US expansion weighs on Oregon plans
Steven Newman said the company's profit was in line with expectations in the three months ended June 30.
Eroad [NZX: ERD], the electronic road user charges and transport services company, said first-quarter trading is in line with expectations, although its North American beachhead in Oregon is behind schedule as the firm starts expanding into other US states.
Chief executive Steven Newman yesterday told shareholders in Auckland the company's profit was in line with expectations in the three months ended June 30, with costs on track and contracted units ahead of expectations, according to speech notes filed with the NZX. Eroad's New Zealand and Australian businesses have accounted for the higher than expected contracted units, although Newman said that was "down to timing rather than any major change in demand or customers."
Eroad entered North America last year, using Pacific state Oregon as a beachhead, and Newman said the company wants to enter Washington, California, Nevada and Idaho by the end of the 2016 financial year.
"We believe it is important to establish our presence outside Oregon to ensure we can access and address the wider North American opportunities," Mr Newman said. "In Oregon we are slightly behind expectations which we put down to the expansion I referred to earlier into the neighbouring states and continued refining of our sales staffing model to fit Eroad's needs and the Oregon market."
In May, Eroad reported a loss of $1.3 million in the year ended March 31 on sales of $17.6 million, below its prospectus forecast for $19 million in revenue.
The offer document projects sales of $44.1 million in the 2016 year, and Mr Newman said the expanded US business, which wasn't contemplated in the forecast, has the "capability to achieve the company's growth objectives beyond PFI (prospective financial information)." That's due to the company reporting more rental income than expected, particularly in the US.
Eroad shares rose 0.8% to $3.68, and have gained from the $3 initial public offering price in August last year.
(BusinessDesk)
Paul McBeth
Fri, 07 Aug 2015
Fri, 07 Aug 2015
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Eroad first-quarter trading in line with expectations, US expansion weighs on Oregon plans
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