Utilities measurement specialist IkeGPS says its March-year revenue will be only about 5 percent higher than a year earlier, after the company failed to close a large contract for its Ike Analyze service.
Wellington-based Ike uses GPS technology in its software and field equipment to measure and record pole and line data and make it easier for power and telecommunications firms to build and manage their networks.
The firm, which in November had forecast a 30 percent increase in annual revenue, warned in January that that figure – and an expected break-even position in the March quarter – were in doubt.
Today Ike said its gross margin for the year will be about 35 percent higher than the $4 million reported last year. In percentage terms, it is expected to be higher than 65 percent, from 51 percent last year.
Earnings before interest, tax, depreciation and amortisation will be “significantly” improved but breakeven on that measure “will not be achieved” for the fourth quarter.
“Ike’s focus on scale delivery into large infrastructure businesses inherently brings timing uncertainty around deal closures and consequently some lumpiness to growth, particularly in any near-term forecast,” chief executive Glenn Milnes said. “We continue to pursue various outsize IKE Analyze contracts with existing customers, noting that one large follow-on opportunity that had been forecasted for FY19 did not close in the period.”
Ike shares last traded at 53 cents. They peaked at 76 cents in early January and are down 24 percent so far this year.
Milnes said revenue from the firm’s core North American utility and communications segment will be more than 25 percent higher than the $5.8 million reported a year earlier.
He said the pace of the roll-out of fibre and related networks across North America continues to increase and Ike’s position with several major firms operating nationally gives it “heightened visibility” into region-by-region growth opportunities for the coming year.
“Importantly, the latter part of Q4 FY19 has seen a positive uptick in new run rate contracts which provides positive momentum as we enter FY20.”
He said increasing uptake of the firm’s Ike Analyze service will see about 80 percent of the firm’s 2020 financial year revenue coming from recurring software subscriptions or from the ongoing use of the Ike platform.