Friday 18th October 2019
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Eroad reported strong third-quarter sales growth but didn't pick up as many small to medium business customers as expected. It is also looking at a possible secondary listing on the ASX.
The Auckland-based firm installs electronic distance recorders and tracking devices in road transport fleets across Australia, the US and New Zealand.
Total contracted units rose 28 percent to 109,380 in the three months to Sep 30, it said. Of that, the number of vehicle logging units in New Zealand lifted 15 percent to 75,674 and were up 62 percent in North America at 32,193. In Australia, they lifted 39 percent to 1,513.
In the nine-month period, total contracted units were up 27 percent versus the same period a year earlier with the North American market lifting 54 percent.
Eroad said there were strong deployments in the US for its largest enterprise customer. The signing of another large enterprise customer in June saw it install about 1,650 contracted units for that customer within eight weeks.
However, the company noted the run rate for small and medium business customers was below expectations. It also said it has not seen the increase in its sales pipeline expected ahead of the Dec. 16 deadline the US government set to replace legacy devices with electronic logging devices, or ELDs.
Eroad said it continues to build a brand presence in Australia, although sales to small and medium businesses were also below its expectations. "However, the pipeline of enterprise customers - with longer sales lead times - remains encouraging and above original expectations," it said.
It said that following the re-launch of its Australian business and growing interest from Australian and other international investors, the board was considering an ASX foreign exempt listing. That would provide more alignment between the company’s business operations and its investor base.
A decision is expected in early 2020 and it remains "committed to maintaining an NZX listing," it said.
The stock rose 2.3 percent to $3.10.
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