Mark Heine, chief executive of fleet management, technology, tolling and services company ERoad. Photo / Dean Purcell
Mark Heine, chief executive of fleet management, technology, tolling and services company ERoad. Photo / Dean Purcell
ERoad has delivered on its promise to rein in spending and focus on growth in its latest half-year financial report.
After a rocky year of an almost-acquisition and a discounted capital raise, the results represent stability that could provide a solid bedrock for future growth.
The board has affirmed guidancefor the full financial year of 6-9 per cent revenue growth to between $175 million and $180m, with a normalised Ebit (earnings before interest and tax) of up to $5m.
Company leadership highlighted an established presence in New Zealand and an initial foothold in North America as the foundation for the company’s potential development in the coming years.
In the six months to Sept 30 this year, the company reduced free cashflow to $200,000, down from $21.7m in the first half of its prior financial year.
Ebit decreased slightly to $400,000 from $1m, although when normalised for expenditure related to an upgrade from 3G to 4G hardware, Ebit increased to $1.9m from a loss of $3.4m.
Overall net profit decreased from $5.6m to $1.5m. Heine said the results reflected a focus on strategic growth and robust financial management.
“In March this year, I outlined our focus was on repositioning ERoad’s business model to simultaneously reduce cost, drive growth and generate cash. Six months on, we are seeing delivery.”
In the investor presentation document, the total addressable market (TAM) for ERoad’s three major regions is defined, with NZ at $100m, of which the company has $89.4m, and Australia at $500m, with $11.2m.
North America’s TAM, according to the document, is $10 billion, with ERoad claiming $77.2m revenue from the region, or 0.77 per cent.
Heine called growth in North America the second strategic priority after upgrading to 4G compatibility ahead of global efforts to shut down 3G.
“Operationally, in H1 FY24, we have recruited and onboarded a vice president of sales, implemented a market price uplift of 3 per cent to reflect the greater value provided to customers, and redrawn our product roadmap to focus on this growth market.”
Part of the plan is to use its agreement with current customer Sysco, one of the world’s largest wholesale food delivery companies, to help win new customers in the region
Heine said: “We are now substantially through installing the 9,000+ vehicles in the fleet of the Fortune 500 company Sysco and have already expanded their penetration through supplying a subsequent 1,400 connections.”
The company also has a new partnership with Trane Technologies, which it said will help expand opportunities in the cold-chain market through Trane’s ThermoKing refrigerated trucks.
TradeWindow
Customs and freight forwarding software firm TradeWindow is moving to cut its cash burn from $1m a month this financial year to below $200,000 a month as it battles adverse capital market conditions and a failed investment deal.
TradeWindow's share price has drifted down over the last month to close yesterday at 22 cents from 27 cents a month ago. Photo / File
The Auckland-based company announced it was slashing headcount by 40 per cent to a total of 48, on top of earlier announced reductions that mainly affect its research and development activities.
Directors and senior management are to take temporary salary reductions, with the company reporting strong growth in recurring revenues from existing customers and a focus for the meantime on growing revenue from existing rather than new products.
TradeWindow said it was also continuing discussions to divest the Rfider business and its Assure+ traceability product.
The announcements accompanied earnings results for the six months to Sept 30, which showed revenue of almost $3 million in the latest half, compared with $2.4m in the same period last year and a forecast for year-end of revenue of between $6m and $6.5m for the full year, up from $4.9m a year earlier.
“TradeWindow continues to anticipate achieving monthly Ebitda breakeven in the second half of FY25,” said Smith.
“We look forward to providing an update to shareholders when we release our third-quarter shareholder update in January.”
TradeWindow was hit twice by headwinds this year, with an attempt to raise $20m in new capital in January pulling in only $5.4m and then the failure of London-based blockchain technology investor nChain to honour a deal that would have injected $2.4m in cash into the business as part of a strategic partnership.
Its banker ASB has extended a waiver on a breach of covenant on its $1.1m lending facility, caused by the nChain breach, to June next year.
The company’s share price has drifted down over the last month to close yesterday at 22 cents from 27 cents a month ago and a high point of $2.80 in early January 2022.
