IkeGPS optimistic about FY19 after 'solid' first quarter

IkeGPS chief executive Glenn Milnes. Photo / File

IkeGPS, the unprofitable laser measurement tool maker, said it had a solid first quarter and plans to "substantially accelerate" sales of its new IKE Analyze product.

Revenue was $1.9 million in the three months ended June 30, up 48 per cent on the same period in 2017, Ike said today.

Some $1.7m of that came from sales of its IKE4 product. The Wellington-based company said two pilots of IKE Analyze, which delivers pole analysis and asset reports, had been concluded successfully in the quarter, and "follow-on contract opportunities have the potential to deliver significant revenue from Q2 FY19."

Chief executive Glenn Milnes said the business's annualised run rate - a non-GAAP accounting measure commonly used by software as a service companies - was $1.2m per month "with the potential to grow significantly."

Ike had $1.2m in cash at the end of the quarter, down from cash and equivalents of $2.6m as at March 31, with $1.1m in receivables, and said it is managing operating costs tightly.

Milnes said the success of the IKE Analyze pilots and the "meaningful pipeline of sales opportunities" the company has developed have created an opportunity to substantially accelerate the growth of the IKE Analyze business.

"This would require higher levels of working capital in the short term but could deliver outsize revenue and gross margin growth over and above our base FY19 plan if we are successful with this initiative," Milnes said.

"More generally, usage of the IKE4 solution with target accounts continues to show that against existing work practices IKE4 increases efficiency in the field by approximately 2x and increases efficiency in the back-office by approximately 5x for make-ready engineering. This gives us confidence in the potential to continue to grow the North American market."

In the March 2018 year, Ike narrowed its net loss of $6.7m, or 9 cents per share, from a loss of $10.6m, or 18 cents, a year earlier. The company said at the time it expects to lift annual sales by more than 30 per cent again and keep operating costs flat, leading to earnings before interest, tax, depreciation and amortisation breaking even.

The company's shares rose 1.8 per cent to 58 cents and have gained 36 per cent this year.