Jade Software targets early return to profit as logistics outlook improves

Tuesday 13th September 2016

Jade Software expects to return to profitability ahead of its target of late 2017 as customers show renewed vigor in buying the software developer's port management software.

The Christchurch-based company's logistics business - which mainly reflects its Master Terminal port management software - lifted revenue 39 percent in the six months ended June 30, and has been the cornerstone of Jade's growth aspirations for several years. Managing director David Lindsay said that unit had seen a turnaround in demand from customers in the US, Europe, Asia, Australia and New Zealand after a lull in 2015 when declining global freight and skinnier margins for shipping lines and terminal operators blew out Jade's lead times to close deals.

"That demand is right across all our operations and we believe that momentum is going to continue through the second half, but more importantly, we're seeing demand continue on into 2017 and beyond," Lindsay told BusinessDesk. Jade had budgeted for a return to profitability in late 2017 and "we're currently running ahead of that."

Jade's group sales rose 17 percent in the first half, with smaller gains in the software developer's solutions business, which builds digital and enterprise products primarily for the utilities and finance sectors, and Lindsay said those numbers had increased again in July and August, which meant "cash was going to hold up even more than anticipated."

The software developer reported a loss of $3.5 million in calendar 2015, compared with a loss of $1.1 million a year earlier, with revenue largely flat at $29.8 million while expenses rose 6.4 percent to $30.1 million.

Lindsay said the company's research and development programme aims to improve the existing Master Terminal product and build a cloud platform to broaden its scope beyond marine transport.

"Everyone is struggling with the problem of sharing information between their own operations in the supply chain," he said.

On the digital arm, Lindsay said the "general upswing in IT demand" had continued in Australia and New Zealand though the focus on disrupting technologies such as machine-to-machine connectivity and artificial intelligence was ahead of the market, with most companies still involved in transitioning their legacy systems to a digital platform where their customers can interact with them.

(BusinessDesk)

BusinessDesk.co.nz

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