IkeGPS expects lumpy revenue to 2018 and beyond

Laser measurement toolmakerIkeGPS maintained its breakeven forecast for 2017 but won't achieve projected sales growth after a weak first half, and expects lumpiness in its revenue to 2018 and beyond.

In November, IkeGPS posted a wider first-half loss at $6.8 million from $4.4 million a year earlier, with operating revenue falling to $2 million from $4.3 million.

The company says Ike4 sales into the US electric utility and communications market had strengthened in the third and fourth quarter, but it doesn't expect to achieve 50% year-on-year unit volume growth due to the "soft" first half.

The Ike4 is the company's fourth-generation field data collection product for use by utility, engineering and telecommunications companies to inspect utility poles.

"Ike believes that the long-term market opportunity for its Ike4 solution is significant, growing and over the long run will deliver consistent revenue growth and profits," the company says.

"However, the time to close larger contracts is lumpy and these have been slower than anticipated in the FY17 period. Ike expects this lumpiness will continue and that it may create both half yearly upside and downside in revenue performance through FY18 and beyond."

Chief executive Glenn Milnes says the first half of 2017 was difficult for the company, but it is looking to grow sales in 2018 after taking a healthy cash position.

Another product, the Stanley Smart Measure Pro, is the result of a licensing agreement for a Stanley-branded mobile software app agreed in late 2014.

Sales of that product in the construction market are expected to reach 39,500 units, representing 58% volume growth from the previous year.

In November, Ike said about $2.8 million of sales of the product expected for the first half had been pushed out to the second half due to a supply-chain glitch.

Revenue and volume sales for its Spike product, which largely come from sales into the signage market, are expected to grow between 25-50% year-on-year, a downgrade from the company's projections when announcing its first half results when it said sales momentum had remained strong and was on target for 50% annual growth.

Ike is putting in place recurring revenue models with subscription add-ons available for all its products, meaning revenue and margin per sale have increased over two to three years after the sale but there is lower upfront revenue, the company says.

The company's shares gained 8.6% to 38c, extending the recovery from a record low 32c on February 3, and have declined 46c in the past 12 months. The shares were sold at $1.10 each in its 2014 initial public offering.

(BusinessDesk)