EROAD HALF YEAR 2018 ANNOUNCEMENT AND UPDATE
Integrated technology, and services provider EROAD Limited says it has enjoyed record sales growth in both its foundation New Zealand market and its growing North American market.
Highlights for 6 months to September 2017 and business update
- Revenue at $20.9 million up by 35% over same period last year
- EBITDA of $4.0 million during the period underpinned by EBITDA of the New Zealand/Australia business which reached $11.1 million during the period
- Net Loss before tax $3.7 million, driven by investment in US sales activity
- Total Contracted Units in New Zealand/Australia 49,802 up by 31% since September 2016
- Total Contracted Units in North America 9,736 up by over 84% since September 2016
- Q1 and Q2 of FY18 were both record sales quarters for the New Zealand and North American markets
- Customer Retention Rate remains strong at 98%
- Future Contracted Income grew to $75 million during the period up $17m or 29% in 6 months
- Secured new credit facility from the BNZ totaling $33.4 million for initial term of 12 months with initial drawdown in July 2017. Post September 2017, EROAD has subsequently signed a credit approved facility letter with the BNZ to further extend its facilities by approximately $16 million, to further support expected growth
- Strong momentum has continued in the business with total contracted units increasing in October 2017 by 1,133 units for the New Zealand/Australia business and 1,166 units for the North American business
- As part of EROAD’s continuing focus on growth in the US, EROAD has engaged First NZ Capital to undertake a strategic review of its North American business. The review is focused on evaluating options to further capture the compelling growth opportunity in North America.
New Zealand & Australia
EROAD’s New Zealand business enjoyed two record sales quarters during the six months to September 2017, and finished the period with a strong pipeline of demand for the second half of FY18.
Chief Executive Steven Newman said health and safety services, such as driver behaviour, are now as strong a driver of sales as electronic Road User Charges (eRUC) services, which continue to grow well. The company continues to engage with an ever more diverse range of large and small customers as fleet owners and managers begin to appreciate the positive business outcomes that can be achieved by ensuring safety within their businesses.
Mr Newman said, ‘Our customers are improving health and safety thanks to services that support safer driver behaviour. And road planners and policy makers now have high quality network data from the activity of around 50,000 vehicles on our platform. Road transport accounts for around 15% of fuel used in New Zealand, and our customers are achieving, on average, fuel savings of around six per cent, representing a significant cost saving and carbon saving to the economy.’
Mr Newman said he was particularly pleased that two of New Zealand’s leading companies, Fulton Hogan and Waste Management, had invested in new, sophisticated EROAD in-vehicle technology, with ~4,500 Ehubo2 units being installed in their transport fleets to further improve their management of health and safety.
In 2009 EROAD introduced the world’s first nationwide electronic road user charging (eRUC) system in New Zealand. Currently half of all heavy transport RUC is collected electronically, representing a rapid transition to e-commerce on a voluntary, industry-led basis, due to the cost-savings and benefits to customers.