SLI improves result, targets Brazil and Japan

Shaun Ryan CEO and Co-Founder of SLI Systems. New Zealand Herald Photograph Richard Robinson.

SLI Systems is targeting Brazilian and Japanese markets while there is a lack of competition there.

The NZX-listed company - whose name stands for search, learn and improve - builds and sells search tools for online retailers, who are charged a monthly fee for these services.

The company posted a first-half loss today of $2.3 million, which was slightly better than its internal forecasts.

Lower costs contributed to this figure and the company said it had hired less staff than anticipated during the 6 months to December 31.

SLI has taken on 18 new people from the end of last year and expects its full year loss to the end of June to be around $7 million, in line with predictions.

SLI, which listed last April, reported revenue of $10.6 million for the six months ending December 31. Its costs for the period were $13.3 million.

The company say its key metric is annualised recurring revenue, the committed revenue it has from its customers at a point in time.

At 31 December SLI had $21.6 million of committed revenue from its customers for the next year. This was up 26 per cent from the same time in 2012.

SLI said it was difficult to compare the company's core financials to a previous period because there was no comparative entity prior to listing to line these up against.

Almost 60 per cent of SLI's ARR is from North America, 17 per cent was from the United Kingdom, 12 per cent from Australia and 8 per cent from Brazil. Only 3 per cent of the ARR is from local customers.

Its ARR had grown by 95 per cent in Brazil in the year to December 31.

"There's less competition so there's an opportunity for us to get in there and dominate, so that's very much what we're trying to do and what we'd like to replicate in Japan as well...if we go into somewhere like Europe where there are established competitors it's more trench warfare," said chief executive Shaun Ryan.

Earlier this year SLI opened an office in Japan, which Ryan says is the world's second largest e-commerce market.

The company expects to have $25.9 million of ARR at the end of June this year, which is what it forecasted in its prospectus prior to floating.

SLI's shares were down 2.5 per cent this afternoon to $2.73