IkeGPS says 2016 sales near bottom of guidance on late orders

IkeGPS [NZX: IKE] says annual sales were at the bottom end of its lowered guidance with $2.2 million of orders received in the final month of its current financial year to be booked in the 2017 financial year.

The Wellington-based company said revenue in the year ended March 31 was "around the lower end" of the January forecast for sales of between $9.2 million and $11.5 million when it trimmed its forecast, citing a delay in orders for its new products. That's up from $4 million of revenue in the 2015 financial year when ikeGPS missed the $6.5 million projected in its initial public offering prospectus.

The laser measurement tool developer expects to book almost $1 million of revenue from the March orders, which weren't able to be manufactured and shipped before the end of the month and will fall in the first quarter of the 2017 financial year.

"The company's expectation for the 2017 financial year is for year-on-year growth rates to continue at high levels," ikeGPS said in a statement. "IkeGPS believes that investors will see tangible results in the period as a result of the investments made into capability, technology and infrastructure."

Last week the company reshuffled its executive team, relocating the chief financial officer position to the US where it's considering a secondary listing, and disestablishing a cross-market sales role, handing responsibility for revenue growth to individual business unit leaders.

The company said the launch of its new IKE 4 cloud-based product and its subscription revenue model is expected to "almost double total revenue and margin per user over a three-year period" while forgoing some upfront revenue in the process.

"IkeGPS feels more confident than ever about the opportunity to continue to build customer acquisition, revenue and profits across the electric utility market. However, forecasting the timing to close sales continues to be a challenge given the large and lumpy nature of these enterprise deals," it said. "The subscription revenue model associated with IKE 4 ... is expected to help smooth this lumpiness over time and as the business continues to scale."

The company also said it had made a series of measures to cut costs in the second half of the financial year just ended.

IkeGPS will announce its annual result on May 20.

The shares last traded at 63c  and have dropped 10%  so far this year. The shares were floated at $1.10 in a 2014 IPO when the company raised $25 million of new capital as it shifted away from production development to sales and marketing.

(BusinessDesk)

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