Monday 23rd January 2017
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IkeGPS is targeting Europe's sign market in a new distribution deal spanning 12 countries which the laser measurement toolmaker expects will accelerate sales of its Spike product.
The Wellington-based company has entered into a distribution relationship with Swiss sign and graphics supplier Spandex to sell ikeGPS's Spike product in 12 European countries, it said in a statement. Spike has three core products - cloud-based software, a mobile app, and laser module that attaches to smartphones - and retails at US$499 with annual subscriptions costing between US$50 and US$249 thereafter.
A Spike photo can capture the measures of a sign or graphic location making it easier for sign makers, and ikeGPS had more than 2,000 US sign companies using the product in the 2016 financial year. It has previously projected more than 3,000 new Spike signage customers in the year ending March 31, 2017 with a 60 percent uptake of the cloud-based subscription service.
"Spandex has an unmatched presence in Europe and we’re proud to partner with such a significant and respected industry player," chief executive Glenn Milnes said. "Spandex has already placed orders to support launch activities, and our expectation is that through calendar 2017 we will see 300 to 400 Spike’s sold into each of the larger markets such as Germany and 100 to 200 Spike’s sold into each of the smaller regions such as Benelux."
Milnes later clarified he considers the UK, Germany, France and Spain as large markets with the other eight small, although Italy will become a large market in the current year.
That implies ikeGPS anticipates between 2,000 and 3,200 Spike sales in calendar 2017, which would reap between US$1 million and US$1.6 million at the advertised price.
"We think this is significant a) given Spike’s impact and adoption across the US sign market in 2016 and b) given’s Spandex’s dominance in terms of product distribution and growth in Europe in the sign market," Milnes said in an email. "Our goal is to introduce various new software features over the next one-to-four quarters to add further value to our sign market solution."
In November, ikeGPS reported a first-half loss of $6.8 million on operating revenue of $2 million, blaming a supply chain problem for delays in the recognition of some sales until the second half. It still expects to break even on a cash basis in the fourth quarter of the 2017 financial year.
The company's shares were unchanged at 34 cents, and have more than halved over the past 12 months.
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