Ann: FORECAST: IKE: ikeGPS General Update for 6-Month Period to...

• Release Date: 15/10/15 08:30
• Summary: FORECAST: IKE: ikeGPS General Update for 6-Month Period to September 2015
• Price Sensitive: No
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					IKE
15/10/2015 08:30
FORECAST
PRICE SENSITIVE
REL: 0830 HRS ikeGPS Group Limited (NS)

FORECAST: IKE: ikeGPS General Update for 6-Month Period to September 2015

- High revenue growth. Outlook for this growth rate to continue -

BROOMFIELD, Colo.--FY16 represents ikeGPS' (NZX:IKE) first full financial
year as a public company and the first full year where the company is
benefiting from the investments into sales, marketing and product development
following its IPO in July last year. In advance of the release of ikeGPS'
audited financial results for the first six months of FY16, expected to be 20
November 2015, ikeGPS is pleased to update the market with the following
highlights.

Results
In the six months to September 2015 ikeGPS expects that results will include:

o Revenue and other income to grow to around $4.5 million, ahead of budget
and plan for the period. This is more than 2.5 times growth against the prior
calendar half-year period. The company has now exceeded revenue and other
income for all of the prior full year.
o Gross margins to grow at approximately the same rate.
o The net loss to be in line with the budget and plan for the period while
ikeGPS continues to execute its stated high-growth and customer-acquisition
plan.

Performance
In the first half of FY16 performance highlights included:
o Smartphone product sales over-performed and developed an even stronger
outlook. ikeGPS' smartphone-based product portfolio has evolved such that,
today, ikeGPS views Spike and original equipment manufacturer (OEM) as the
same product bucket but with differing channels to market. Run rate sales of
these products are exceeding targets year-to-date with Spike being rapidly
adopted across the U.S. signage industry in particular, and ikeGPS' Stanley
Smart Measure Pro (OEM) solution beginning to be rolled out across North
America to address the construction and do-it-yourself markets. Collectively,
smartphone product sales were approximately 63 percent of total revenue.
o MapSight product sales grew but remain lumpy. MapSight sales in the period
represented approximately 37 percent of total revenue. This was lower than
plan; however, based on the sales opportunity pipeline, ikeGPS expects
MapSight to contribute a significantly larger proportion of total revenue in
the second half of the year. Through the period, ikeGPS continued to win
customers across the U.S. electric utility market with particular success
selling into fiber infrastructure providers and also across California-based
utilities, telcos and service providers.  The sales opportunity pipeline also
continued to grow with increased visibility of materially larger potential
sales orders and single account opportunities of $1 million and greater.
Forecasting the timing of these pipeline sales continues to be difficult, so
ikeGPS expects the lumpiness of MapSight revenue to continue.
o Stanley Smart Measure Pro was positioned to hit retail channels across
North America. ikeGPS developed, manufactured and began shipping a new
product, the Stanley Smart Measure Pro, which is being released to market
with partner Stanley Black & Decker and sold through Lowe's home-improvement
stores across the U.S. and Canada. The Smart Measure Pro is another
significant step in ikeGPS' strategy to deliver high-volume mobile hardware
and mobile apps, and, on the back of this, to provide high-value subscription
software products to end users via ikeGPS' cloud-based measurement platform.
In this case, ikeGPS is providing an end-to-end solution--including the
hardware tool, mobile app and cloud software solution--for measurement
challenges faced by construction and DIY customers. This solution is based
entirely on ikeGPS intellectual property--where ikeGPS manufactures and
delivers the hardware units, ikeGPS builds and delivers the smartphone app
into the Apple App Store and Google Play Store, and ikeGPS hosts the
cloud-based software and subscription product.
o The ike cloud platform was introduced. ikeGPS developed and launched a new
cloud-based measurement platform for use on the desktop. This software is
initially enhancing the offering to smartphone customers--Spike and the
Stanley Smart Measure Pro. But, importantly, this will also serve as a
high-value, scalable platform for future ikeGPS solutions, allowing the fast
delivery of new features, functionality, integration and enabling the
potential introduction of new subscription-based business models.
o Capability development continued, including leadership shifting to the U.S
market. In the period, CEO Glenn Milnes and CTO Leon Toorenburg relocated to
ikeGPS' Colorado office in line with the company's focus on sales and market
development in the U.S. market. ikeGPS also continued to execute on the focus
to recruit and on-board talent across the business. The ikeGPS team was grown
to 68 staff in offices in Colorado, Seattle and Wellington.

Outlook
Pleasingly, the company has performed ahead of the FY16 plan to the half
year. ikeGPS maintains its outlook for this high growth to continue and for
revenue and other income for the full year to more than triple against FY15
to approximately $14.3 million. Related to this outlook:
o ikeGPS' product and revenue mix for FY16 could differ from that set out in
the PFI and IPO offer documents of July 2014 with its smartphone products
(categorized in the PFI as Spike and OEM) potentially materially
outperforming (cumulative FY16 PFI forecast revenue of $4.4 million) and
MapSight potentially underperforming (FY16 PFI forecast revenue of $9.2
million).
o As context, at the time of ikeGPS' IPO, its smartphone products were at a
precommercial stage.  The market response to these new products has been
greater than expected, and there is the potential to grow associated revenues
more quickly than planned. With respect to MapSight, as outlined above,
ikeGPS expects to continue to experience lumpiness in associated large
enterprise MapSight sales processes and believes that this translates to
potential downside risk for MapSight revenue for the full year. ikeGPS
continues to hold the view that the electric utility sales opportunity for
MapSight is at a tipping point and that its solution is optimally positioned
in front of this large market for the long term. Overall, ikeGPS is extremely
pleased with the momentum and quality across the company's product set.
o ikeGPS is also pleased to have achieved the "sell-in" of the Stanley Smart
Measure Pro product. October marks the launch of the product in Lowe's
stores, where ikeGPS now needs to achieve "sell-through." ikeGPS' goal is to
have high adoption from end customers of the mobile hardware and mobile app
and some sales of the associated subscription software. If this occurs, the
potential follow-on revenue opportunity in FY16 is significant.
o On the back of Spike's rapid penetration of the U.S. signage industry,
ikeGPS will further implement sales and marketing initiatives to scale
further in this geography as well as pursuing the signage market across
Europe and Asia Pacific, seeking to replicate U.S. market success.  ikeGPS
also expects to begin scaling sales into new vertical markets for Spike in
the U.S. market in the coming six month--with early traction evident in
insurance, real estate and defense verticals.
o From a product development perspective, ikeGPS expects to introduce further
exciting new products and technology capability with a particular emphasis on
its solutions for the electric utility market.
o Based on market feedback and adoption of new cloud-based products, ikeGPS
may consider shifting business models more quickly to subscription-led
offerings to maximize product adoption and long-term customer value.

CEO Glenn Milnes commented; "We believe that the opportunity in front of the
company continues to expand. We are very encouraged by the response to our
products by a diverse and widening mix of customers and business types. We
are building high-quality and unique products that customers love, and,
importantly, we are fulfilling an unmet need. ikeGPS now has a core global
team in place with strength and depth to carry it into new growth avenues.
Like any technology company early in its sales cycle, ikeGPS faces challenges
to maintain such rapid growth rates, but we believe that the company's team
and product platform will continue to strengthen."

###
About ikeGPS
ikeGPS is changing the way the world is measured, utilizing its smart laser
measurement solutions to capture, record and export measurement data.
Electric utility, telecom, government, engineering, construction, real
estate, signage, and other field data collection-based professionals use
ikeGPS products to modernize the way measurements are taken and shared.

Spike, a laser accurate Smartphone measurement solution, and GE MapSight, an
all-in-one customizable field data collection solution, uniquely combine
intelligent software and hardware into comprehensive but simple-to-use tools.
With an ike photo, you can capture measurement, distance, location and other
data in real time, significantly improving business process, user
productivity and safety.

ikeGPS is headquartered in Wellington, New Zealand and is listed on the New
Zealand Stock Exchange under the stock symbol IKE. The company's global sales
and marketing organization is based in Broomfield, Colorado, which supports
global efforts in the Americas, EMEA, and APAC. For more information, visit
http://www.ikegps.com/.

Contact
Glenn Milnes, CEO
ikeGPS, Inc.
+1-720-4181936
[email protected]
End CA:00271762 For:IKE    Type:FORECAST   Time:2015-10-15 08:30:50