ikeGPS upbeat, despite missing full year revenue targets

Remote measurement software developer ikeGPS [NZX: IKE] will miss its prospectus revenue targets for the 2015 financial year, but says that's because sales of its new smartphone application, Spike, are running three months behind schedule and are expected to exceed targets.

Eight months after listing on the NZX, the company also says it's entertaining interest from US investors.

While ikeGPS had no requirement for cash, it was "attracted to the prospect of having US-based strategic investors on its share register, given the significant business opportunity in that market," chief executive Glenn Milne said in a statement to the NZX. A specialist investor relations advisory firm, MKR Group, has been appointed to assist the process and further develop a "long term investor relations programme in the US market."

Giving guidance on the current financial year, Milne said the company would make a smaller loss than its prospectus forecast of $5.33 million, although revenue would come in below the forecast of $6.46 million, "primarily due to anticipated sales from its start-up smartphone solution falling just outside the March 31 2015 financial year end."

The company had now "received those expected orders from its Original Equipment Manufacturer (OEM) channel for its smartphone solution", meaning OEM revenue for the 2016 financial year would "significantly increase from the previously expected $1.47 million to at least $2.5 million."

"We expect to ship tens of thousands of units in FY16," Milnes said.

It expects revenues of $14.3 million in the 2016 financial year, in line with prospectus forecasts. While sales in the year ended March 31 of its new Spike product were just under half the prospectus forecast level, sales of the unit are expected to exceed prospectus forecasts for 2016, which were put at 2,712 units and $2.91 million of revenue. Cloud and subscription products would be introduced in the first half of the current financial year to help drive sales.

IkeGPS shares listed at $1.10 apiece last July in an initial public offering that raised $25 million, and closed yesterday at 80 cents, having never traded up to its original issue price.

(BusinessDesk)