NZX-listed Wellington Drive Technologies has announced stronger financial results for the six months ended 30 June, in part driven by the Internet of Things (IoT).
Revenue grew 18 per cent for the half to $28.1 million over the same half last year compared with guidance of 10 per cent.
Second quarter revenue was the largest single quarter revenue in the company’s history at $16.3 million.
Wellington Drive CEO Greg Allen attributed the growth to serving more diverse markets in particular the company's growing customer base for IoT solutions and its traditional electric motor business.
"We were particularly pleased with our record second quarter revenue and winning our first dairy products customer," Allen said.
WDT is building an IoT platform called SCS Connect to help food and beverage brands, cooler manufacturers and retailers collect and use data from their point of sale equipment, he added.
Specifically, this allows them to both sell more and improve their operational performance.
This first dairy sector customer is expected to have reached US$1 million of revenue by early 2019 and is an indicator of how Wellington’s IoT solutions are being used beyond the more traditional market of carbonated soft drinks, WDT said.
"The dairy sector is an important target market for the company’s IoT platform," Allen added. "This platform will help improve management of in-store dairy coolers and also facilitate improved management of food quality and loss for the industry."
Meanwhile, the acquisition of iProximity, an Australian-based digital marketing company, was also completed on 2 July.
Several field trials are underway using iProximity’s systems, including working with large global food brands to deliver proximity based information to retailers and shoppers, WDT said.
Wellington’s SCS Connect is being integrated with the iProximity digital marketing toolset to manage fleets of beacons installed in customer coolers, deliver asset management tools to food and beverage brands and supermarkets and deliver product promotions to consumers.
"We have exciting innovations in the pipeline, expanding both our IoT product range and EC motor platforms and we continue to explore new market opportunities," Allen said.
WDT’s US dollar revenue for the Americas region grew by 28 per cent due to strong sales of ECR2 motors and the SCS Connect IoT platform.
Asia Pacific revenue, however, was flat year-on-year as regional customers moved more slowly than expected towards IoT adoption and brands reduced their cooler placements.
Europe, Middle East and Asia region revenue was down 12 per cent in US dollar terms, driven by lower volumes from bottle cooler customers in markets impacted by macro-economic difficulties, such as Turkey and Southern Europe.
In first quarter 2018, motors represented 66 per cent of the company’s US dollar revenue while IoT solutions were 29 per cent - in second quarter, motors were 64 per cent while IoT solutions were 32 per cent.
SCS Connect hardware sales were 45 per cent up on the comparable period in 2017 while SCS Data revenues continued to grow with US$0.7 million invoiced in the half, up 88 per cent on 2017.
In addition, gross margin at 25 per cent was consistent with the first half 2017.
Furthermore, operating spending increased as the company continued to invest in the skills and infrastructure required to support a broadening product range and diversifying customer base - this has required additional personnel in areas such as customer management, marketing and software development.
Delving deeper, the company made a net loss of $0.2 million for the half, an improvement on the $0.5 million loss for the same period last year.
Cash at 30 June 2018 was $2.6 million compared to $1.6 million at 31 December 2017. Net debt was $0.6 million versus net debt of $1.0 million.
Operating cash flows for the six months amounted to $1.8 million, up from $0.3 million for the corresponding period in 2017.