Wednesday 29th August 2018
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GeoOp, the workforce management app developer, narrowed its full-year loss before interest, tax, depreciation and amortisation and expects strong revenue growth to continue this year.
The Auckland-based company said the underlying ebitda loss was $1.9 million for the year to June 30 versus a $3.4 million loss in the prior year, due to reduced costs and material increases in annualised recurring revenue. Total revenue was $4.2 million, up from $4.1 million in the prior year.
GeoOp reported a net loss of $8.7 million, including $5.0 million non-cash impairment of GEOsales intangibles as well as $700,000 of one-off costs linked to its failed bid to list on the Australian stock exchange and associated restructuring costs.
In line with earlier guidance, revenue growth is expected to exceed 30 percent in the current financial year and it expects to generate a positive ebitda run-rate halfway through the 2019 calendar year, it said.
"The distraction of the ASX IPO process and management changes are now behind us. We are implementing strategies to achieve a minimum of 30 percent revenue growth in the current financial year and are now seeing sharply improved results," said chair Roger Sharp.
The Auckland-based 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.
ARR was $4.8 million at the end of June, 24 percent higher than in December 2017, with the rise largely due to existing customers moving to subscription pricing at current market rates. Month-on-month ARR growth averaged 4.5 percent in the final four months of the year to June 30.
“We are very pleased with the progress we have made transitioning our customers onto the new subscription pricing. As we indicated in May, this transition will continue to drive material revenue growth through to the end of the current financial year," Sharp said.
According to Sharp, moving legacy customers to new subscription pricing will lead to a reduction in licence numbers "however, GEO is focused on profitable growth and requires its licences to generate a positive contribution at market prices," he said.
The company said the GeoSales business has been performing below its potential due to the company focusing on its GeoService product during FY17-18.
“GEOService saw subscription revenues in the year to June increase 20.8 percent from the same period a year ago to $2.5 million, while GEOSales annual subscription revenue was down 12.5 percent to $1.4 million," said Sharp,
The company is executing a plan expected to see GEOSales return to growth in FY19. Still, Sharp said that "notwithstanding the board’s and management team’s view that GEOSales has significant untapped potential, we have taken a non-cash impairment of $4.9m to goodwill and a further $0.1m impairment to capitalised development costs."
Customer acquisition was modest in FY18 and this trend has continued into the new financial year. However, it expects enhancements to its digital marketing and new channels to drive growth in customer numbers and licenses in the second half of FY19.
The company also said its monthly cash burn continues to improve and is currently averaging around $120,000 a month.
The stock last traded at 17 cents and has shed 60 percent over the past 12 months.
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