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GeoOp narrows losses with Oz purchase

NZ Newswire logoNZ Newswire 29/08/2016 Jonathan Underhill

GeoOp, the NZAX-listed management app developer, has narrowed its full-year loss and met guidance for revenue, based on pro-forma numbers that assume the inclusion of InterfaceIT.

The company plans to raise as much as $4 million to sustain it until profitability in 24-36 months.

The loss was $2.7m in the 12 months ended June 30, from a loss of $5.8m in a 15-month period a year earlier, the Auckland-based company said. Sales rose to $1.9m from $1.2m.

GeoOp bought InterfaceIT (IIT) for $9m in shares and convertible notes on June 1, giving the Australian company's owners about 32 per cent of the merged entity and rising to as much as 64 per cent if certain conditions are met.

Pro-forma revenue as if the two companies had operated as a combined entity through 2016 was $4.58m, just above the projection in an independent assessment of the deal.

GeoOp shareholders overwhelmingly approved the merger with the Australian mobile sales app developer and welcomed Roger Sharp to the board, where he has replaced Mark Weldon as chairman.

GeoOp's core technology platform has been rebranded as GeoServices, while IIT's product has been renamed GeoSales.The GeoSales and GeoServices application suite now serves nearly 25,000 small and medium-sized enterprise customers in more than 30 countries, the company said on Tuesday.

The company expects to move into profit within 24 to 36 months and will require between $2m and $4m of capital until then.

As a result it will shortly announce plans to raise capital, with what it called "significant commitment" from directors and major shareholders. GeoOp had cash reserves of about $1.1m as at June 30 and directors and related parties provided a $425,000 cash injection after balance date to provide additional liquidity until completion of the capital raising.

GeoOp shares last traded at 25 cents and have fallen 38 per cent this year. The stock sold at $1 in its initial public offering in 2013 and soared as high as $4.49 in November of that year. At the current price, the company is worth $12.3m.

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