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GeoOp lifts revenue in first half but reports wider earnings loss after failed attempt to migrate to ASX

Thursday 1st March 2018

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GeoOp, the workforce management app developer, lifted total revenue 5 percent in the first half but reported a wider loss before interest, tax, depreciation and amortisation after an unsuccessful attempt to migrate to the Australian Securities Exchange. 

The Auckland-based company said total revenues reached $2.2 million in the six months to Dec. 31, versus $2.1 million in the prior year. Its ebitda loss, however, was $2.2 million versus $1.7 million in the prior year. Stripping out the ASX IPO costs, the loss was $1.55 million versus $1.7 million in the prior year. The company quit a planned float in Australia when it reached an impasse with the ASX over a series of restrictions. It then opted to remain in New Zealand and migrate from NZAX to the main board.  

The company said its GeoService subscription revenues grew 18 percent to $1.2 million, with annualised ARPU increasing 11 percent to $92.38. GeoSales subscription revenues declined by 12 percent to $711,000, due to the timing of sales campaigns using the GeoSales application, and a poor sales performance in the US.

The company also said its cash burn is "improving materially."  A restructuring in the second quarter, implemented after termination of the ASX listing, has materially reduced operating costs from the third quarter, it said.

Average operating cash burn for the first half, excluding the IPO and restructuring costs, was $220,0000 a month versus $280,000 in the prior year and $450,000 in the first half of the 2016 financial year.

Since balance date, operating cash burn has averaged less than $170,000 per month (before R&D grants), and about $140,000 per month (after grants).  The company received $171,000 in "other revenue," including grants in the half and "acknowledges Callaghan Innovation and NZTE for their ongoing support during the period through a growth grant and introducing business opportunities," it said. 

Looking ahead, the company said strategies are being activated to deliver growth. The new GeoService application will offer an improved user experience, easier sign-ups and improved retention, it said. A digital marketing partner is being engaged to restructure Geo’s digital marketing funnel to drive more leads and improve conversions. New partner channels are being launched, including a global app marketplace, and integrations with existing channel partners are being enhanced.

Chief executive Anna Cicognani resigned on Jan. 24 and on Feb 1. Kylie O’Reilly was appointed to replace her. "My immediate focus is on putting the tools and systems in place to accelerate growth," said O'Reilly. 

GeoOp shares were up 8.7 percent to 13.7 cents.


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