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ERoad shares jump 10%


ERoad shares jump 10%, extending gain after strong quarterly US sales

By Sophie Boot

July 7 (BusinessDesk) - ERoad shares have soared 31 percent since Wednesday, hitting a four-month high, as buying continued after the company posted positive quarterly sales earlier this week.

On Wednesday, Auckland-based ERoad said it sold 1,321 contracted units in the US in the three months ended June 30, taking its total number of devices to 7,423. That's an annualised increase of 87 percent, accelerating from a pace of 36 percent in the March quarter and equal to 86 percent of the US sales it managed to achieve in the entire March 2017 financial year.

The shares climbed 10 percent to $2.15 today, the highest since March, and building on earlier gains that included a 9.1 percent jump on the day of the announcement. ERoad shares listed at $3 in 2014 following a $40 million initial public offering.

Grant Williamson, a director at Hamilton Hindin Greene in Christchurch, said it was just a continuation of the earlier buying without huge volumes, but the stock was doing well.

"Whether it can maintain this I'm not too sure, it has obviously been a pretty reasonable disappointment over the past few years. It will need to continue to pump out good quarterly reports to maintain this, investors won't gain a lot of confidence until it can do that."

ERoad's chief financial officer Jason Dale said Wednesday that the sales figure represented its "single biggest growth in units for a quarter" since the company was founded in 2000.

The IPO was intended to provide a funding platform to launch into Oregon, and thus the US, on the invitation of the state's transport office. At the time, Oregon wanted to introduce light vehicle mileage tax in a shift away from fuel tax used to fund roads, and was the first in the world to develop a road user charge tax which New Zealand has since adopted for heavy vehicles.

Those plans changed when US operators put off buying decisions ahead of a December 2017 deadline for commercial drivers to adopt and use electronic logging devices, and ERoad spent the last financial year paving the way to build its sales and marketing capacity in the world's biggest economy to prepare for that timeframe.

(BusinessDesk)

ends

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