Eroad added 2,326 data terminals in the June quarter, largely on the strength of resurgent New Zealand business, but expects lower annual sales growth than previously signalled.
In a quarterly update ahead of today's annual meeting, the transport tech services and vehicle telematics company said it "remains confident in continued unit growth across all three markets, albeit it is likely to be lower than delivered in financial year 2020 and previously anticipated for financial year 2021."
The three markets are NZ, where Eroad said 1,938 units were sold, North America, accounting for 256, and Australia where 132 units were sold in the three months ended June. Total contracted units at the end of June were 118,814, of which 82,304 were in NZ, 34,258 in North America and 2,252 in Australia.
The firm has come off a positive March year when earnings before interest, tax, depreciation and amortisation climbed 73 per cent to $27.1 million, outpacing a 32 per cent lift in revenue to $81.2m.
Kiwi business key
The number of contracted units represents a six-year compound annual growth rate of 42 per cent, largely on the back of NZ expansion into current customer fleets and the addition of new North American customers.
Chief financial officer Alex Ball said the firm experienced 'near normal' growth levels across both its small and medium, and enterprise growth segments in NZ, and this month had launched its new Eroad day logbook supporting drivers via their mobile phones.
Growth in the North American business had largely been generated from small and medium customers which Ball said were "in line" with the prior quarter's levels. Sales of 824 units were offset by returns of 568 units, of which 273 reflected the impact of Covid-19. The rest was "churn to competitors."
In North America, Eroad continued to work to improve the small and medium business pipeline and complete sales despite the lockdown restrictions in many states.
The firm also had $23.9m of headroom in a $60m debt facility, although Ball said any significant "organic or inorganic" growth would need to be equity funded.
Ball said, while expectations for the financial 2021 results were unchanged, the impact of Covid-19 in Eroad's core markets had not allowed the company to "definitively assess the impact on incremental growth for the remainder of financial 2021."
Eroad shares were recently up 0.3 per cent at $3.41 and are up 7.9 per cent year to date.