IkeGPS widens annual loss

Leon Toorenburg, ikeGPS founder holding the Spike, a smartphone attachment.

IkeGPS, the laser measurement toolmaker, widened its annual loss after a "difficult first half", but expects growth and cash breakeven in 2018.

The Wellington-based company posted a $10.7 million loss for the year ended March 31, from $8.8 million a year earlier, with revenue dropping 36 per cent to $5.8 million.

The drop reflected a weaker first half caused by "several one-off headwinds", which was followed by a return to growth in the second half, the company said.

Ike projected a return to growth in 2018, forecasting more than 40 per cent sales growth of its Ike4 units, more than 50 per cent growth for new sales of its Spike units, and cash breakeven in the year. The company sold about 2,100 Spike units in 2017, while figures for the Ike4 units weren't immediately available.

Ike said it couldn't make specific forecasts for its Smart Measure Pro sales due to lack of visibility into Stanley Black & Decker, which delayed a large order of the product earlier this year, meaning it didn't achieve forecast cash breakeven for the fourth quarter of 2017. The company will update the market with specific guidance when it has more certainty, it said.

"After three prior years of greater than 100 per cent year-on-year growth, FY2017 was a challenging period for our business, with a disappointing 1H followed by a return to growth in 2H FY2017," chief executive Glenn Milnes said in a statement.

"Positively, we feel that we have addressed the one-off headwinds encountered in FY2017 and now have momentum back across our products and markets to underpin a return to strong growth. Trading for the first two months of FY2018 is materially ahead of the pace set in FY2017."

Ike had $2.7 million in cash and equivalents at the end of 2017, down from $5.3 million a year earlier.

The company cut its employee count to 50 from 56 over the course of 2017 and is "able to readily manage headcount levels down" as part of cost management for its 2018 business plan, according to notes from its auditors PWC. Stress testing on the 2018 plan, with expected revenue down 28 per cent and operating expenses down $950,000, would see Ike remain a going concern despite reduced available cash, the auditors said, while the company's directors believe it could raise capital if sales or costs don't meet expectations in the year ahead.

"The group's ability to improve its financial capacity and cash flow generated from its operations cannot be assured," PwC said.

Ike received $185,000 from Callaghan Innovation, down from $640,000 a year earlier, while $1.92 million or one-third of operating revenue was derived from one customer, about the same proportion as in 2016.

The shares were unchanged at 38 cents and have dipped 2.6 per cent this year.