IkeGPS cuts revenue forecast as orders for new product delayed to 2017

Friday 29th January 2016

IkeGPS, which this month raised $900,000 from institutional investors, has downgraded its sales outlook for the 2016 financial year, citing a delay in orders for its new product to the first half of 2017.

The Wellington-based company expects revenue of between $9.2 million and $11.5 million in the 12 months ending March 31, from a previous forecast range of $12 million to $14.3 million, it said in a statement. That's up from the $4 million of revenue reported in 2015 when ikePGS missed the $6.5 million projected in its initial public offering prospectus.

"This is primarily because of timing, with the expected additional Stanley Smart Measure Pro orders now projected to fall into the first half of 2017, rather than the second half of 2016," the company said. "This revised outlook represents between 2.4 and 2.8 times growth against 2015, and between 4.9 and 6.1 times growth against 2014, but is below that projected in the company’s IPO offering document."

The company posted a first half loss of $3 million in November, as sales jumped 152 percent to $4.3 million, and is foregoing short-term profits to chase long-term international sales growth.

IkeGPS said sell-through of its new Stanley Smart Measure Pro product have exceeded plans and are approaching 1,000 units per week. Wider US roll-out, including online channels such as Amazon, is now in process along with expansion into Europe. IkeGPS had expected these orders in the second half of this year.

"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," the company said. "It is expected that this condition will become less impactful as the business continues to gain scale and as recurring revenue streams increase."

The shares fell 5.7 percent to 66 cents, and have never traded above the $1.10 IPO price since listing in July 2014.

BusinessDesk.co.nz

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