Thursday 23rd February 2017
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(Fixes annual recurring revenue figure in 2nd paragraph)
SLI Systems more than doubled its first-half loss as a strong New Zealand dollar and the loss of three major customers at the end of the 2016 financial year continued to weigh on earnings.
The Christchurch-based e-commerce software seller's net loss widened to $1.28 million in the six months ended Dec. 31, from $502,000 a year earlier, as revenue declined 12 percent to $15.7 million. Its preferred measure of growth, annualised recurring revenue, dropped 13 percent to $31.1 million.
The annualised recurring revenue fall was due to the strong kiwi dollar and customer losses, the company said. ARR was down 7.6 percent on a constant currency basis from $33.7 million in the first half of 2016.
SLI shares have fallen 40 percent in the past 12 months and last traded at 45 cents, well below the 2013 initial public offering price of $1.50, after the company overhauled its business in the wake of losing three major customers. SLI hired a new chief executive and appointed three other senior managers last year to address the decline in revenue with a view to getting the company back on track in the 2017 financial year.
The company's customer retention rate by value was unchanged at 87 percent in the first half compared to the year before, while its gross margin on sales dropped to 74.4 percent from 76.4 percent. SLI had $6 million cash on hand as of Dec. 31, down from $6.8 million six months earlier. The company is not yet paying dividends.
"We are starting to see early signs that the changes we are making can deliver the desired performance improvements. We are also in a strong financial position with $6 million cash on hand and over $31 million of recurring revenue," chair Greg Cross said. "As previously indicated, we believe we have sufficient capital to meet our current business plans but we continue to monitor cashflows and remain committed to achieving cashflow breakeven without an additional capital raise."
Chief executive Chris Brennan said the company is optimistic it will start realising the benefits of its changes in the latter half of this calendar year.
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