ERoad first half sales disappoint in US
Monday 03 October 2016 03:45 PM
ERoad first half sales disappoint in US, outperform in NZ and Australia
By Sophie Boot
Oct. 3 (BusinessDesk) - ERoad, the logistics and fleet management software and hardware developer, says its first-half sales were overall in line with its expectations, though its growth market numbers disappointed.
The company's total contracted units, one way it measures sales, grew 18 percent to 43,430 in the six months to Sept. 30. Gains in its established market in Australia and New Zealand were ahead of its expectations, with sales rising 17 percent to 38,129 in the first half, while gains in the United States were behind expectations, advancing 18 percent to a total 5,301 in the same period.
ERoad said it will give more details at its first-half results launch in November, and will begin providing total contracted unit data quarterly to keep investors updated. The shares dropped 8.6 percent to $1.70.
The company has been focusing on growth in the United States, where it sees opportunity driven by new federal electronic logging device (ELD) rules. Announcing ERoad's 2016 results in May this year, chief executive Steven Newman said it would "continue to execute its growth plans while at the same time remaining cost conscious as the business grows to ensure sustainable growth" in 2017, and it looked "forward to completing the market execution strategy and re-alignment of the business to address the nationwide ELD opportunity."
At the time, Newman also said ERoad was looking to recruit a US-based leader and develop its indirect sales channel, to make it one of the first movers in a "very significant market space."
It posted a $1.3 million net loss in the year ended March 31, 2016, compared with a prospectus forecast of a $5.5 million profit. In that year, its total contracted units advanced 43 percent on 2015 to 36,953.
ERoad, which was the first company to roll out a national GPS-based road user system, raised $40 million from investors when it listed on the NZX in August 2014 at a price of $3 a share, later reaching a high of $4.28 in November 2014.