ERoad driven by Australasian gains amid slow US growth

Photo / Brett Phibbs

ERoad, the logistics and fleet management software and hardware developer, turned a first-half profit from a loss a year earlier as gains in Australia and New Zealand made up for slower growth in North America.

The profit was $611,000 in the six months ended September 30, from a loss of $1.9 million a year earlier, the Auckland-based company said. Revenue rose 55 per cent to $12.2 million.

ERoad affirmed its annual guidance for profit of $500,000 and revenue of $26.5 million after lowering its estimates in September as an acceleration of its US expansion hurt short-term sales and added costs.

The volume of distance recorder units contracted to ERoad customers increased 58 per cent to 31,298 at September 30 from the year earlier period, it said. Total contracted units in North America rose more than 300 per cent to 3158, and increased by 47 per cent to 28,140 in Australia and New Zealand, it said.

"While sales were slower than anticipated in North America, the shortfall was made up for in New Zealand/Australia," said chief executive Steven Newman.

The company expects its Oregon-based North American business to grow, once new federal regulations on electronic logging devices are announced, Newman said.

The company sees broader opportunity in the North American market coming from new regulation and an international fuel tax agreement which covers 2.9 million vehicles across the US and Canada, and requires accurate reporting of mileage and fuel consumption by state to calculate fuel tax.

The company has developed an indirect sales channel in an attempt to target larger networks serving transport fleets.

"This enables us to address the 4.5 million vehicles subject to one or both of these regulations," Newman said. "This is a substantial opportunity over and above Oregon weight-mile tax services."

Newman will be based in Portland, Oregon, for the next six months to support ERoad's management, training and sales focus in North America. While the North American business hadn't grown as quickly as the company would have liked, its sales were 90 per cent ahead of New Zealand sales at the equivalent point of market entry, he said.

ERoad is now collecting 31 per cent of New Zealand's heavy vehicle road user charges, up from 26 per cent a year earlier and an expansion of its services is aiding its growth, the company said.

Its New Zealand business is expected to continue to achieve strong sales growth in the second half of the year.

The company's staff increased 58 per cent to 180.

The company won't pay a first-half dividend.

ERoad

• Six months ended September 30
• $611,000 profit, up from a loss of $1.9m
• $12.2m revenue, up 55%.