Talk about a skyrocket. Shares of Nearmap Limited (ASX: NEA) have shot up over 320% year to date...
Reason for meteoric rise
Here’s the skinny. The Sydney-based company, which provides high-res aerial imagery and “PhotoMaps”, launched a new website with a paywall in late 2012, and saw strong uptake in subscriptions.
In releasing the company’s half year 2013 results, managing director Simon Crowther said of the paywall: “This was a carefully thought out strategy to monetise nearmap’s content and build a sustainable, recurring revenue base for the business. The response since then has been very positive and reflects the value that organisations place on nearmap’s high quality, current and changing PhotoMaps.”
As Crowder went on to point out, the half year result only included one month of the new subscription sales. This was still enough to contribute to a 51% increase in revenue and reduce net losses after tax by 38%.
Looking forward, Crowder said: “Our customer base continues to grow and we are now seeing increasing demand coming from not only the lucrative government and commercial sectors, but also the SME market. Servicing this segment represents a significant opportunity for us to build scale, and broaden our customer base.”
Still too early to call
Today, Nearmap has nearly $6 million in cash and no debt. The company has an $86 million market cap. While it still seems to early to call — especially as the company is not yet profitable and Google could yet mount a more credible threat — Nearmap is a small cap to watch.
