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


ERoad 1H loss in line with forecast, sees upside in Oregon

ERoad 1H loss in line with forecast, Oregon market may be bigger than first thought

By Suze Metherell

Nov. 25 (BusinessDesk) - ERoad, the logistics and fleet management company, is on track to meet its prospectus full-year forecasts after reporting a first-half loss and flagged potential upside, saying the Oregon market may be bigger than first thought.

The Auckland-based company widened its first-half loss $1.9 million in the six months ended Sept. 30, from a loss of $448,264 a year earlier, reflecting the cost of its August listing on the NZX, it said in a statement. Earnings before interest, tax, depreciation, amortisation and costs of listing surged 172 percent to $2.3 million while sales jumped 82 percent to $7.9 million.

Founded in 2000, ERoad says it was the first company to provide a nationwide GPS-based road user charge system in 2009. It first turned a profit of $2.9 million in the year ended March 31, 2014, on $10 million in sales. In its July prospectus it forecast revenue to rise to $19 million in 2015, and to $34 million in 2016, but expected to post a loss of $1 million in 2015, due to $2 million in listing costs, before returning to profit of $5.5 million in 2016.

"Overall we expect our full year results to be in line with prospective forecast information based on strong sales in New Zealand balancing lumpy sales in Australia, with Oregon on track with expectations," chief executive Steven Newman said. "Our results for the half year are very pleasing and demonstrate continued strong demand for our products and services in our important New Zealand market, acceptance of our products and services internationally, and we continue to build momentum in these markets."

The company debuted on the bourse in August, raising $40 million in new capital to fund international growth, selling 15.3 million shares at $3 apiece. Existing owners sold 2 million shares, or $6 million worth, into the initial public offer, to keep a 75 percent stake in the company. At Sept. 30 the company had cash and cash equivalents of $40.6 million, up from $6.8 million a year earlier.

As vehicles become more fuel efficient, there is a shift towards user-pays for road building and repairs from the traditional excise fuel tax, in the US and across the globe, something ERoad's technology is looking to cash in on. The company launched in Oregon in April, where the Weight Mile Tax means heavy vehicles pay per distance travelled, and ERoad has since raised its expectations on the size of the market there above the 306,000 heavy vehicles registered for WMT.

"The experience of our sales teams is that many fleets with vehicles subject to WMT also operate other vehicles," the company said. "ERoad has recently won three new customers that have a total of 142 vehicles registered for WMT and a further 154 vehicles not subject to WMT but still requiring commercial services. Having selected ERoad for the WMT vehicles three customers are now considering equipping all other vehicles with ERoad's service."

Shares of ERoad rose 0.5 percent to $4.21, and have gained 40 percent since listing in August, having touched a record of $4.28 earlier this month.

The company got a 'please explain' by NZX regulation after the stock market regulator and operator queried the stock's 58 cent gain to trade at $4.25 on Nov. 6 from $3.67 on Oct. 29. Under continuous disclosure rules listed companies must inform the market of all price sensitive events as soon as possible. The company said it complied with NZX listing rules, without offering any further explanation behind the gain in share price.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Fuel Leak: Refinery Prepares To Repair Damaged Pipeline

Refining NZ has confirmed that it is to start repairs on a section of its multi-product fuel pipeline which was shut down following a jet fuel leak last Thursday. More>>uption.htm">More>>


StatsNZ: Economy Grows 0.8% In June Quarter

“Strong export and domestic demand underpinned growth this quarter,” national accounts senior manager Gary Dunnet said. “Demand for exports has resulted in strong production growth in manufacturing and service industries.” More>>


Stats NZ: Annual Net Migration Remains High

Annual net migration was 72,100 in the August 2017 year... Migrant arrivals reached 132,200, a new annual record, and migrant departures were 60,100 in the year ended August 2017. More>>


Expert Reaction: Cassini's Grand Saturn Finale

After a 20 year mission, NASA's spacecraft Cassini will meet its demise this week by plunging into Saturn's atmosphere and burning up. More>>


Jurisdiction: Court Rejects Cathay Unit's Retirement Age Of 55 For Pilots

The Supreme Court has backed two Auckland-based Cathay Pacific pilots who claimed local law meant they couldn't be forced to retire at 55. More>>


Supreme Court: AFFCO Loses Lockout Appeal

The essential question in the appeal was whether those who presented themselves for work at the beginning of the 2015/2016 season were at that time “employees” for the purposes of the lockout provision... This Court has unanimously dismissed the appeal. More>>