Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


IkeGPS forecasts annual losses as it ramps up sales

IkeGPS forecasts annual losses as it ramps up sales of MapSight, Spike

By Jonathan Underhill

June 23 (BusinessDesk) - IkeGPS Group, which sells portable measuring devices and software with applications ranging from the military to architecture and construction, is forecasting losses through until at least 2016 as it uses the proceeds of an initial public offering to build a sales force and further develop its products.

The Wellington-based company, which counts Jenny Morel's No 8 Ventures and business partner General Electric among its shareholders, aims to raise $25 million by selling 22.7 million shares at $1.10 apiece. After the sale it will have about 50 million shares on issue and an indicative market value of $55 million. Net proceeds will be $23.1 million, assuming it meets its target.

IkeGPS is forecasting a three-fold increase in revenue to $6.5 million this financial year, rising to $14.3 million in 2016, with the bulk of the growth through its forecast horizon generated by its GE MapSight product.

At the same time, its net loss is forecast to widen by 133 percent to $5.3 million in the current year and widen further to a loss of $5.8 million in 2016, according to the company's prospectus. Expenses triple this year to $11.5 million and grow further to $19.6 million in 2016. Gross margin grows to 60 percent this year and 65 percent next year, according to its forecasts. It doesn't expect to pay dividends.

"Ike is currently a loss-making business that is not anticipated to make a net profit in the prospective period as the business invests in growth," the company said in its prospectus. "Although ike has been operating since April 2003, it is only recently that ike’s current business model has been developed and so investors should treat ike as an early-stage growth company."

IkeGPS and GE agreed in December that GE would sell ikeGPS's electricity market asset management product as the GE-branded MapSight. Its Spike measuring product, which employs laser, camera and software in a mobile phone, will be initially targeted at the architecture, engineering and construction sectors, it said. The company expects to ship 289 MapSight units this year and 626 in 2016, while Spike units shipped will rise to 2,533 this year and 2,712 next year.

The products were developed with the US Army Corps of Engineers, US intelligence agency developer In-Q-Tel and software providers for electricity utilities, it said. The market for MapSight in the US could be worth US$700 million a year, it said.

"Ike’s target markets are large, its current penetration is low and the business is highly scalable due to a business model that features high gross margins and low marginal cost of sales," the company said.

Employee head count will grow to 84 in 2016 from 59 this year, of which almost two-thirds will be based in New Zealand and the rest US-based.

Last week, ikeGPS said it had firm allocations from brokers and institutions for the entire $25 million it aims to raise next month, while withdrawing plans to raise a further $6 million for existing shareholders. The offer is expected to open on July 1 and close on July 21, ikeGPS said, adding that there would be no public pool.

No 8 Ventures, which is ultimately owned by Morel, husband and former central bank governor Alan Bollard and family interests, currently holds about 28 percent of the company. Wellington businessman Alex Knowles owns about 12 percent and former Wellington mayor Kerry Prendergast and husband Rex Nicholls hold 10.5 percent, Companies Office records show. NYSE-listed General Electric, which has a trademark license agreement with IkeGPS, owns 5.9 percent.

The company currently has more than 200 electric utility and engineering customers, it says.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news