SLI posts smaller loss, improves customer keep

SLI Systems co-founder Shaun Ryan strikes a gong as SLI debuts on the NZX.
SLI Systems co-founder Shaun Ryan strikes a gong as SLI debuts on the NZX.

SLI Systems, the search engine software developer, posted a slightly smaller annual loss than forecast in its May offer document as it sees signs of life in new Japanese and Brazilian markets, and kept more customers on its books than expected.

The Christchurch-based company made a net loss of $2.01 million in the 12 months ended June 30, smaller than the forecast $2.15 million in its prospectus, it said in a statement. SLI Systems raised $27 million in a public offer and from existing investors when it listed in May.

Annual earnings before interest, tax, depreciation and amortisation of $1.77 million was smaller than the forecast $1.86 million.

Revenue was in line with expectations at $18.31 million, and the software-as-a-service firm had a customer retention rate of 92 per cent, ahead of its five-year average of 90 per cent. Annualised recurring revenue, a favoured measure of sales for software-as-a-service firms, was $19.26 million, in line with forecasts.

The software firm affirmed expectations of short-term losses in the hope of grabbing global market share, but didn't offer any firmer guidance.

"There are significant market opportunities in our space and we believe we have the right team to deliver on these," chief executive Shaun Ryan said. "The additional capital raised means we now have the resources to expand more quickly in our new markets."

The shares gained 1.4 per cent to $2.22, adding to yesterday's 4.8 per cent. The stock has climbed 48 per cent from its offer price of $1.50 apiece in the May offer.

SLI Systems had a slower operational cash-burn of $1.21 million in the year from a forecast $1.43 million outflow, and held $15.38 million in cash and equivalents as at June 30, some $316,000 more than expected from cheaper float costs.

The company is looking to derive more revenue from countries outside the US, UK and Australasia, and was encouraged with its growth in Brazil and had signed up its first customer in Japan, Ryan said.

- BusinessDesk

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