IkeGPS shares surge on $200k deal with Bell Canada

ikeGPS mangaing director Glenn Milnes is confident for the potential to win more larger scale contracts.

IkeGPS shares soared after the company announced a $200,000 contract with Canada's largest communications company.

The contract with Bell Canada involves the laser measurement toolmaker's Ike 4 device, which is the biggest contributor to FY18 financial targets for revenue growth and progress to breaking even on a cash basis. Revenue from the first phase deployment of the system will be about $200,000, it said.

The company's shares, which have dropped 20 per cent this year, were trading up 25.8 per cent this afternoon at 39c on the news.

Last month, Ike upgraded sales expectations but maintained its breakeven guidance for the full year after revenue lifted and its loss narrowed in the first half.

It expected to lift Ike 4 sales 70 per cent in the year to between 300 and 360 systems sold, equating to $1 million in revenue growth.

Today the company said it had received orders for approximately 330 Ike 4 systems so far, and "should various pipeline deals conclude through Q4 FY18 then Ike expects that full-year volumes could materially exceed 360".

Chief executive Glenn Milnes reiterated the breakeven expectations and said that although the company expected Ike 4 sales to remain lumpy, "advances with other target account customers in the North American market provide us with confidence for the potential to win more larger scale deployments".

The Bell contract involves the use of Ike's system in one of the Canadian company's regional fibre engineering business units and could extend more widely in the business if Ike meets its targets. Bell has already conducted a six-month pilot of the system.