Geo, the struggling workforce productivity software company formerly known as GeoOp, says a radical clean-up under a new chief executive could see the company on the path to break-even in the 2019 financial year.
Chair Roger Sharp admitted last year’s attempt to move the company’s stock exchange listing from New Zealand to Australia had been a major and fruitless distraction. However it had prompted some “very deep thinking” about boosting revenue and becoming profitable, he told the company’s annual meeting today.
The appointment of Sydney-based chief executive Kylie O’Reilly, previously with Australian Associated Press, had produced “a whirlwind of activity” at Geo, Sharp told shareholders. Trading for the six months to the end of October this year suggests the company is on track for revenue growth of at least 30 percent in the year to June 30 and an earnings before interest, tax, depreciation and amortisation “break-even run-rate by the middle of FY19”, he said.
Geo provides cloud-based business productivity software and apps for companies with mobile and distributed workforces. However it has been a disappointment to shareholders since listing on the New Zealand stock market at $1 in 2013. Since the end of 2016, the stock has rarely traded above 40 cents, and since the beginning of the year has mostly vacillated between 11 cents and 19 cents.
The company suffered a $8.5 million loss in the June year, including listing costs from the failed ASX foray, and a $5 million write-down in intangibles. Revenue was $4 million, up 6.3 percent on 2017.
“While I cannot say that any of us are pleased with this result, it is necessary to look beneath the headline numbers to understand the significant improvement in performance that we have driven in the second half of full-year 2018, and since,” Sharp told shareholders. “In the second half, we saw 24 percent growth in annual recurring revenues, a significant improvement in profitability and all convertible debt was either repaid or converted to equity.”
He said monthly cash burn – the amount of capital a company spends to finance overheads before generating positive cash flow from operations – was down from almost $500,000 to $130,000. Geo’s aim was to eliminate cash burn totally next year, with “a significant improvement in the company’s cash position”.
Sharp’s speech ended with bizarrely positive news for the company’s long-suffering shareholders – Geo is fit to keep operating.
“For the first time ever, our auditor has not qualified the company’s accounts over its ability to continue as a ‘going concern’, Sharp said. “Today we are firmly focused on a suite of growth initiatives, and on moving into profit, rather than raising money or trying to do an IPO elsewhere. It feels very good to be in this position.”
Geo’s shares last traded yesterday at 15.5 cents.