Auckland-based fleet management systems developer EROAD is now profitable after reporting a 57 per cent increase in sales in its 2018 financial year.
NZX-listed EROAD reported record growth of contracted units in Australia, New Zealand and North American markets of 61.5 per cent to boost sales revenue of $51.5 million.
EBITDA lifted to $15 million and net returns after tax to a slim $0.2 million profit compared with a loss in 2017 of $5.5 million.
EROAD cited major growth in its enterprise customer base including Downer Group, Waste Management, Fulton Hogan and food distributor Bidfood.
The company also raised $21.5 million of new capital; $6 million through a share purchase plan for existing shareholders and $15.5 million through an equity placement to existing and new institutional shareholders.
Record sales growth of 191 per cent in North America now means that EROAD has a credible beachhead in this market, the company told shareholders today. Sales in North America exceeded ANZ for the first time in the third quarter of the year.
"We have begun planning for our next phase of growth in North America, which may involve deeper strategic partnerships, and have engaged First NZ Capital to help us with this work,” EROAD chairman Michael Bushby said.
Managing that customer growth proved to be extremely challenging, EROAD said. The company is continuing to implement improvements arising from that experience to ensure sustainable ongoing growth at scale.
However, the company maintained a high customer retention rate of 98 per cent and the proportion of customers renting EROAD’s hardware, rather than purchasing hardware outright, during the year was 90 per cent.
Future contracted income (FCI) reached $92.8 million in 2018, up from $59.9 million last year, driven by the high number of contracts for renewal, a high renewal rate and strong sales growth.
EROAD CEO Steven Newman said the North American business was close to cash flow break-even on a monthly basis.
The company said it had developed the first tethered in-cab electronic logging device (ELD) system to be registered with the US Federal Motor Carriers Safety Administration and the first independently verified ELD to be launched to the North American market.