By Jenny Ruth
May 9 (BusinessDesk) - Struggling workforce productivity software company Geo says annual sales will fall short of guidance and that break-even is further out.
“Geo now expects that its year-on-year growth in annual recurring – subscription – revenues will be 21-23 percent, that growth in total revenues – including non-recurring training and development income –will be about 20 percent,” Geo says in a statement.
It had previously predicted revenue growth of 25-30 percent for the year ending June.
Break-even at the earnings before interest, tax, depreciation and amortisation level had been expected by mid-calendar 2019.
Now Geo says that “an ebitda break-even run rate remains within sight.”
Geo reported a 24 percent rise in sales to $2.5 million for the six months ended December, an $0.6 million ebitda loss and a bottom line loss of $4.5 million. It had $1.96 million in cash at Dec. 31.
“The company’s reduced growth rate is attributable to lower revenues from primarily one Geo for Sales client and to a reduction in customer acquisition spend through digital channels while additional features are incorporated into the new Geo product during May and June 2019,” the company says.
“While the growth in digital customer acquisition has been slightly delayed, the company’s plan is unchanged and it has continued to deliver a range of initiatives,” it says.
That includes relaunching GeoPay with the Stripe platform integrated to test customers, increasing average revenue per unit and building its corporate sales pipeline.
Geo shares last traded at 13.5 cents, giving it a market capitalisation of $10.9 million. They have fallen nearly 30 percent in the past year and are well down on their 2013 float price of $1.
The company replaced its chief executive early in 2018 when Kylie O’Reilly took over.
At the last annual shareholders’ meeting, chair Roger Sharp told shareholders the 2018 financial year had been the first time the auditor, Deloitte, had not qualified the accounts over Geo’s ability to continue as “a going concern.”