IkeGPS narrows full-year loss, looks to 'strong' FY2020 performance

IkeGPS chief executive Glenn Milnes. Photo / File

Utilities measurement specialist IkeGPS narrowed its full-year loss on the back of lower corporate costs and reduced cost of sales.

The company posted a $5.1 million loss for the year ended March 31, down from the $6.7m loss reported a year earlier. Revenue increased to almost $8m from $7.7m, with most of the earnings improvement due to a $1.1m reduction in Ike's cost of sales.

Operating expenses fell to $10.6m, from $10.8m the year before, with lower corporate costs offsetting increased research and engineering costs.

"We are pleased that our focus on the North American communications and electric utility market produced growth in revenue and gross margin," chief executive Glenn Milnes said in a statement.

He said seven of the 15 largest communications and cable companies in the US are either taking up the firm's IKE Analyze product, or engaged in pilots.

Ike shares rose 1.9 per cent to 54 cents. They are down about 23 per cent this year.

Wellington-based Ike uses GPS technology in its software and field equipment to measure and record pole and line data and make it easier for power and telecommunications firms to build and manage their networks.

Today's result reflects what the company signalled in late March when it said it would not meet its revenue and earnings targets for the year. This follows failing to complete a large IKE Analyze contract.

Late last year, Ike had been aiming for 30 per cent revenue growth and expected to break-even at the operating level in the March quarter. Earlier this month it said it had signed up Charter Communications, the largest cable company in the US, and Crown Castle, the country's largest provider of shared communications infrastructure, to its IKE Analyze service,

Today the company said revenue in its core US communications and power segment grew 27 per cent to a record $7.3m for the March year. About $1.4m of that was from IKE Analyze, while annual software subscriptions brought in another $1.9m. About 91 per cent of that figure was from renewals.

Gross margin climbed 34 per cent to $5.4m and improved as a percentage of sales to 67 per cent, from 51 per cent the year before.

Ike didn't provide a forecast for the coming year, but said the first quarter had started well. It says it is in early discussions with several large firms, but said the timing of any outcome from those is uncertain.

It noted the US fibre sector is in the second year of a potential US$300 billion seven-year investment cycle.

"We are optimistic about the potential to deliver a strong FY20 performance, including new tier-1 customer wins," Milnes said.