ERoad tips record sales in 2018 as NZ firms embrace new tech, US mandate spurs purchases
By Paul McBeth
Aug. 4 (BusinessDesk) - ERoad expects to post record sales in the current financial year as its second generation of technology is embraced by New Zealand firms keen on improving driver safety and as a looming North American compliance regime drives US buyers.
The logistics and fleet management company anticipates New Zealand and the US will be key in reporting record sales in the year ending March 31, 2018, with growth in Australia likely to be more modest, chief executive Steve Newman told shareholders at yesterday's annual meeting in Auckland.
"We expect FY18 will be ERoad’s largest ever sales year continuing our growth trend," Newman said in speech notes published on the NZX. "That’s thanks in part to the strong market response to ERoad’s second generation hardware and the positive impact it brings to driver safety."
The Auckland-based company reported a 25 percent increase in annual revenue to $33 million in the 2017 financial year on a 30 percent increase in the number of contracted units sold, with North American sales lagging behind expectations as US operators delayed buying decisions ahead of a December 2017 deadline for commercial drivers to adopt and use electronic logging devices.
That turned around in the first quarter of the 2018 year with the company posting its fastest quarterly sales growth in North America. While a US lobby group is attempting to delay the introduction of the regime, ERoad's management is optimistic the new rules will go ahead.
"We have experienced an uplift in sales in North America in the first quarter of FY18 and plan for that to continue throughout the remainder of FY18, during which the mandate comes into force requiring customers to comply which will force a purchase decision," Newman said. "We expect our sales to come from across the US due to ERoad’s broad based sales platform and execution strategy."
Shareholders approved the re-election of chairman Michael Bushby and director Tony Gibson at the meeting.
The shares dipped 1.4 percent to $2.17 yesterday, and have soared 36 percent this year, outpacing the 11 percent increase on the S&P/NZX All Index over the same period.