Eroad founder, chief executive and major shareholder Steven Newman. Photo / Supplied
Eroad founder, chief executive and major shareholder Steven Newman. Photo / Supplied
Eroad
Eroad saw its revenue jumped by a third to $81.2m for its financial year ended March 31, 2020, despite Covid-19 delaying contracts in the final quarter.
The NZX-listed fleet logistics company made a net profit of $1.0m against its year-ago net loss of $4.9m (although its accounts also note thepotential for $1.3m to be reclassified, which could ultimately lead to a $0.3m loss).
Shares were up 5.4 per cent to $3.10 in early trading after the result was released, trimming the stock's loss to 2.3 per cent for the year.
Chief executive Steven Newman told the Herald that the need for better contact-tracing, and cost-cutting amid the coronavirus-fuelled downturn, has helped drive a pickup in sales during April and May, particularly in the light vehicle market.
Eroad finished FY2020 with its tracking units installed in 116,488 trucks. Growth continued, despite several deals being delayed in the final quarter due to Covid-19. Source / NZX filing
In terms of a broad forecast for the year ahead, Newman said hardware unit sales would still grow, but at a lower rate, in NZ, Australia and the US. And he saw a pickup in ARPU (average revenue per user per month) from associated cloud services - some of which are being customised for the age of Covid.
Sales spiked in 2018 as the US introduced mandatory electronic device logging for larger trucking companies. Onboarding slumped toward the end of FY2020 as Covid hit. Source / NZX filing
Newman said it would be "irresponsible" of the company to give any financial guidance FY2021 at this point, however.
The Eroad boss said guidance could be possible "When we get out of this chaotic period and into a stable recessionary mindset" - at which point saw companies making more use of Eroad's technology "to take better control of their supply chains and reduce cost."
The outbreak saw Eroad institute a hiring freeze, but the Auckland-based company did not cut any of its 300 staff.
It also refinanced and extended a $60m debt facility, which is 40 per cent undrawn. Newman did not see any need for further financing in 2021 unless Eroad made an acquisition - something he saw as a possibility as Covid hit rivals, particularly in North America. He sees "significant industry consolidation" soon.
The pandemic has seen Eroad undertake a full review of its activities.
Steps taken so far include a hiring freeze, pulling back on marketing and travel cuts.
Eroad introduced several new software-as-a-service (or cloud) features over the past few months, including crash and rollover alerts (in partnership with St John Ambulance, a new private mode, and "MyEroadDashboard", which consolidates fleet metrics into a single-view dashboard.
Newman says other SaaS features will follow in FY2021, helping to boost monthly revenue.
He saw Covid-19 driving more customers to adopt more SaaS features, while arpu was on the up already.
For the year just closed, SaaS average monthly revenue per unit increased to $58.38 per month from $55.08.
On the hardware front, Eroad is introducing forward and driver-facing cameras by the end of the calendar year. Drivers will also get a customerised communication when they first log-on - which could, for example, be instructions on contactless delivery.
Business activity in the transport market was hard to pick, Newman said.
Even within segments, it was swings and slides. Food deliveries to homes were up, for example, but delivers to restaurants were down.
In New Zealand - still Eroad's largest market - the government's shovel-ready projects initiative would help shore-up civil works business. Recently-tightened logbook regulations would also help.
North America - the key Eroad target for growth - was harder to read, Newman said. There were more variables, including Covid-19 infections still being on the increase in some areas, and the looming presidential election.
