ERD
28/05/2015 09:29
FLLYR
PRICE SENSITIVE
REL: 0929 HRS EROAD Limited
FLLYR: ERD: EROAD Annual Result on Track, Compelling Outlook for US
28 May 2015 EROAD Limited reported a strong full year result delivering
continued growth in units and revenue, and successfully established its North
American business in Oregon, USA.
Highlights
o Units on Depot 23,915 up by 78% on last year
o Revenue at $17.6 million up by 76% on last year
o Contracted Units totalled 25,862 up by 81% on last year
o Future Contracted Income reaches $32.6 million, up by 83% on last year
o Customer Retention Rate remains strong at 99.2%
o Net Profit before tax and listing costs reached $1.1 million
o Full year results largely in line with forecast
o Secured customer contracts in Oregon worth $3.1 million.
Full-year to 31 March 2015
EROAD (NZX:ERD) today reports performance largely in line with forecast for
its first full year as an NZX listed company.
"I am delighted with what has been achieved this year. EROAD's successful
NZX listing in August 2014 represented a major milestone for the company. To
continue to grow strongly in New Zealand and successfully establish our
American beachhead is very satisfying," said Chairman Michael Bushby.
Chief Executive Officer Steven Newman said, "Our vision to become an
international leader in the provision of road user charging and compliance
services to the heavy transport sector is well on track. With the funds
raised through the IPO we have been busy building our globally scalable
technology platform and applications to address the significant North
American market opportunities unfolding."
EROAD's first year as a public company has seen the company make significant
progress towards its strategic goals, delivering strong revenue growth. The
company's Established Market, incorporating New Zealand and Australia,
underpinned another year of strong performance with external revenues of
$17.2 million an increase of 72% compared to FY14. EROAD's Net Profit before
Tax and listing costs reached $1.1 million, broadly in line with forecast.
With an increasing number of clients selecting to rent EROAD's hardware
product rather than purchase outright, Future Contracted Income (FCI) reached
$32.6 million in FY15, improving long-term value. The increase in the number
of clients renting hardware, rather than purchasing, has shifted some
revenue, net profit and cash flow, from FY15 to future years.
"Particularly pleasing was how agile the business proved to be in bringing a
rental sales offer to market in the US in response to customer demand," said
Mr Newman.
With customer retention rates reaching 99.2% the company continues to benefit
from earnings stability. Earnings per share was in line with forecast.
Overall, Units on Depot rose to 23,915, representing a 78% increase compared
to the prior year. Total Contracted Units at 31 March was 25,862, comprising
Units on Depot and 1,947 contracted sales pending installation. With a full
complement of sales and support staff on-board and more recruitment occurring
the company continues to build a strong FY16 pipeline.
Full time employees increased 52%, from 102 to 155, in FY15 as the American
and New Zealand operations expanded as planned. The company successfully
recruited high quality engineering and development staff noting that the
global market for technical staff remains extremely tight. To accelerate
sales, EROAD also continued to invest in sales executives, and the company is
establishing regional sales hubs in a number of locations outside of Oregon,
in response to expanded sales opportunities.
Looking beyond Oregon, the company's development efforts in FY15 have been
focused on the completion of its automated fuel tax reporting service and
electronic logbook product. Together these two products will allow the
company to address a market in North America upwards of five million
vehicles.
Mr Newman said, "EROAD's new electronic fuel tax service has been well
received by customers and regulators in North America. I am also very happy
with our development of an electronic logbook to support commercial drivers
to meet their hours-of-service obligations, in preparation for the United
States Federal mandate requiring all interstate drivers to adopt a compliant
electronic hours-of-service product by late 2017."
Outlook for FY16
Mr Newman said, "I am delighted with our achievements this year. Looking
forward the company is well positioned to meet its commercial goals in FY16.
EROAD's strategic priorities remain unchanged. Our Established Market
operation, incorporating New Zealand and Australia, is expected to perform
strongly based on buoyant economic activity, the market's focus on Health and
Safety compliance, and the continued roll out of new services to a diverse
group of customers."
While the New Zealand business will remain a core focus for the company and
continue to grow, EROAD will give further attention to building both its
Oregon business and the infrastructure to support expansion across North
America.
Looking beyond the PFI period (forecasts made at the time of its IPO), the
company has committed to larger premises in Oregon, capable of housing up to
70 sales and customer support staff, to ensure we have the resources to
capitalise on the demonstrable growth opportunities across North America . "I
am confident the company has now put in place the foundations to execute our
shared goal of building a leading global technology and services company," Mr
Newman said.
Dividend
Consistent with its Dividend Policy, EROAD does not intend to pay a final
dividend for the year ended 31 March 2015.
Summary financial statements
Attached to this release are unaudited summary financial statements. The
audit is in progress at present. The summary financial statements for the
year ended 31 March 2015 and the comparative financial information for the
year ended 31 March 2014 have been prepared under the New Zealand equivalents
to International Financial Reporting Standards (NZ IFRS).
About EROAD
EROAD is a leading transport technology and services company, headquartered
in Auckland, New Zealand, with offices in Portland, Oregon, and Melbourne,
Australia. EROAD's in-vehicle technology and global services platform
provides transport operators with automated solutions to manage and pay road
user charges, to meet regulatory and compliance obligations, and to provide a
range of commercial services. EROAD's goal is to offer flexible and powerful
solutions based on our innovative technology to assist in the creation of a
transport sector that is responsive to the evolving needs of business,
government and the wider community.
EROAD was founded in 2000 and is listed on the NZX Main Board (NZX) under the
stock code ERD. EROAD designs and manufactures in-vehicle hardware, operates
secure payment and merchant gateways and offers web-based value-added
services. The EROAD team are experts in their field, highly qualified, and
very experienced in technology and security, SaaS and cloud infrastructure,
the transport industry and the public sector.
EROAD generates Recurring Revenue from charging customers for its services
and also receives revenue from hardware sales of Ehubos as well as other
sources. EROAD is a vertically integrated technology company which allows
the company to provide a better customer experience by integrating the
complete user experience from hardware to software and services. This
arrangement promotes strong customer relationships and ensures more stable
revenues.
For a detailed description of EROAD's business, and terms including Units on
Depot, Recurring Revenue and Retention Rate, which are non GAAP measures used
by EROAD to manage the business, please refer to our Prospectus dated 18 July
2014. Total Contracted Units is a Non GAAP measure used by EROAD which
represents Units on Depot and contracted sales that have been dispatched
pending installation as at 31 March. Future Contracted Income is also a Non
GAAP measure which represents future hardware and SAAS revenue under
non-cancellable long term agreements for installed units as at 31 March.
Contact: Steven Newman CEO on +64 9 9274713.
Attachment
Summary financial statements
End CA:00264927 For:ERD Type:FLLYR Time:2015-05-28 09:29:54
