Eroad lifts sales growth in second quarter

Friday 5th October 2018

Eroad's sales growth accelerated in the second quarter, buoyed by the mandated adoption of the new technology in North America.

Total contracted units rose 5.5 percent to 86,240 in the three months ended Sept. 30, up from 59,538 units a year earlier. Of that, the number of vehicle logging units in its established Australasian market rose 4.6 percent to 65,285, while those in its growing US market climbed 8.4 percent to 20,995.

First-quarter sales rose at a 5 percent pace, with 4 percent growth in Australia and New Zealand and a 9 percent gain in North America.

Auckland-based Eroad said Australian and New Zealand demand remained solid and the pipeline of new contracts meant another 1,500 units are scheduled for delivery in the six months through March. The fleet and logistics management firm's devices align with the New Zealand government's transport for greater investment in road safety.

In the US, Eroad's sales have been growing as states mandate the introduction of electronic logging devices. The Kiwi company's uptake was initially slowed by intense lobbying to delay the tools but it says the transition to the new technology is now in a longer-term continuous sales cycle. A December 2019 deadline to replace legacy products has added to that demand, the company said.

"There are also fleets which rushed to install ELD units to meet the December 2017 deadline which are experiencing 'buyer’s remorse' from the acquisition of ELD solutions that are not meeting their needs," the company said in a statement. "Both dimensions offer opportunity for Eroad, alongside intrastate fleets that are required to adopt ELD solutions to meet state regulatory requirements."

Eroad said annualised sales growth was 22 percent in the first-half with Australia and New Zealand sales up 18 percent and North American sales up 37 percent.

The shares last traded at $3.31, and have declined 7.5 percent so far this year.

(BusinessDesk)

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