SMALL CAPS US plans generate approval for nearmap PUBLISHED: 11...

SMALL CAPS

US plans generate approval for nearmap

PUBLISHED: 11 NOV 2014


nearmap director Rob Newman sees the high level of urbanisation occurring in the US as an opportunity for the group.


Analysts at Bell Potter Securities initiated coverage of nearmap in November, attributing a “buy” recommendation with a 12-month price target of 90¢, which represented a premium of nearly 30 per cent to its share price.

It is worth noting the company’s shares had already spiked some 50 per cent prior to the broker starting coverage. This appeared to predominantly be driven by the group’s decision to expand into the US, using its proven frequently updated high-resolution imagery.

nearmap is the exclusive provider of such data in Australia and it will launch a nationwide “urban catcher” program, applying a similar business model to what has been successful in Australia.

Management sees the high level of urbanisation occurring in the US as an opportunity for the group and intends to establish a sales marketing organisation initially targeting government and enterprise customers to generate immediate subscription revenue.

nearmap estimated it could capture 33 per cent of the US population in fiscal 2014-15, representing more than 100 million people, with the scope to increase to 50 per cent in 2015-16.

nearmap has already laid the foundations for its US expansion strategy, capturing more than 50 million people on both the west and east coast. Bell Potter estimated the group could deliver compound annual earnings per share growth of more than 60 per cent between fiscal years 2014-15 and 2016-17, serving to justify its premium price-earnings multiple.

The Australian Financial Review


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