IKE
29/01/2016 10:00
GENERAL
PRICE SENSITIVE
REL: 1000 HRS ikeGPS Group Limited (NS)
GENERAL: IKE: Q3 update and FY16 full year revenue outlook
For Immediate Release January 29, 2015
IKE update:
FY16 full year revenue outlook, Q3 update, Stanley Smart Measure Pro
sell-through
Highlights:
Initial sell-through of Stanley Smart Measure Pro strong. More markets and
channels confirmed in the US and Europe, underpinning FY17 growth
FY16 full year revenue outlook however impacted by timing of projected orders
relating to Stanley Smart Measure Pro market expansion
Q3 FY16 performance:
o Q3 closed strongly with unaudited sales & other income growing to $7.4m in
the nine months to 31 December 2015 (2.7x prior calendar period).
o As previously announced revenue in the quarter was underpinned by a
material uplift in sales of the company's electric utility solution,
including winning the first $1m account in the US market.
o The quarter was also highlighted by the launch and strong sell-through of
the Stanley Smart Measure Pro product, as detailed further below.
o Spike sales grew strongly through Q3 over Q2 with 672 units sold in the
three months, primarily into the signage market.
o New Spike capabilities were launched, with point-to-point measurement and
app-to-app integration features introduced. Marketing-led Spike sales to
Small-Medium Business type customers, particularly in the signage industry,
is expected to continue to grow strongly. Larger sales-led Enterprise deals
are taking more time to develop, although pilot programmes in new vertical
markets are in place for Q4 with some of the largest Insurance and
Residential Construction companies in the US.
Stanley Smart Measure Pro sell-through:
o As previously announced, in the December quarter ikeGPS and Stanley Black &
Decker, Inc. jointly launched the Stanley Smart Measure Pro product at Lowe's
stores across the US market.
o As an update to that launch, sell-through in the stores has exceeded plans
with current run rate sales trending upwards and currently approaching 1,000
units per week.
o Wider US market roll-out is now in process including the development of new
channels via specialty tools stores and online channels, such as
www.Amazon.com
o European market roll-out is also in process, with firm interest from
several major European markets. ikeGPS is pleased to have received launch
orders for one European territory in Q4, and the company is already
manufacturing an EU version of the product.
o Timing of orders and shipments into these wider roll-out initiatives had
been expected in the second half of ikeGPS' FY16, however these are now
expected to occur through the first half of FY17.
o More broadly, as a result of current sell-through rates ikeGPS believes it
is now well positioned for high growth from this product through FY17.
Full year FY16 revenue outlook:
o Prior guidance for FY16 revenue & other income was between $12m and $14.3m.
o The outlook for full year FY16 revenue & other income is now between $9.2m
to $11.5m.
o This is primarily because of timing, with the expected additional Stanley
Smart Measure Pro orders now projected to fall into 1H FY17, rather than 2H
FY16.
o This revised outlook represents between 2.4x & 2.8x growth against FY15 and
between 4.9x & 6.1x growth against 2014, but is below that projected in the
company's IPO offering document.
The forecasts at the time of ikeGPS' IPO in July 2014 reflected expectations
for triple digit growth as the company developed, which is intact. During
these early stages of the company's sales cycle and rapid growth, and because
of the newness of product offerings, quarter-over-quarter lumpiness of sales
continues. It is expected that this condition will become less impactful as
the business continues to gain scale and as recurring revenue streams
increase.
Based on feedback from customers and partners, ikeGPS is more excited today
than ever about the opportunities in front of the business. Market
penetration to date is less than 1% of target markets. Because the company's
product offerings typically replace manual or semi-automated processes,
ikeGPS solutions represent a new approach to tasks that are performed every
day across many industries in multiple continents.
Following a successful first foray into the signage vertical with the Spike
platform, ikeGPS is currently trialing products with leading companies in
other much larger verticals such as Insurance and Residential Construction.
Investors can expect to see continued expansion into these new verticals and
geographies in the coming year. The company will also unveil a new Electric
Utility solution in February 2016 that will further enhance potential across
that segment.
FY17 is expected to be another transformative year for ikeGPS as the business
continues to enhance product offerings and accelerates the transition to a
recurring revenue model. Because the company has so many business categories
gaining momentum at the same time, the expectation is that organic growth
rates in FY17 will continue at these very high levels. ikeGPS will provide
more detail on the launch its new electric utility solution in early
February, and will provide FY17 forecast information after its financial year
end in March.
ENDS
Contact
Glenn Milnes,
CEO:
+1 720-418-1936
[email protected]
End CA:00276976 For:IKE Type:GENERAL Time:2016-01-29 10:00:09
