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IkeGPS shares soar in improved forecast

NZN 3/05/2016 By Sophie Boot

IkeGPS shares soared 33 per cent after the company said it expects to reach cash breakeven in 2017 on improved sales from its new cloud-based product.

The shares rose 22 cents to 88 cents, a price not seen since February 2015, after the laser measurement tool developer said it expects continuing sales growth across its portfolio of products, increased margins on new products, operating and cost efficiencies, and product-to-market infrastructure.

The Wellington-based company is also investigating a potential NASDAQ listing, subject to the board's review and approval of the terms and benefits.

It raised $900,000 in January from three institutional investors to fund expansion in the US market.

The shares were floated at $1.10 in a 2014 initial public offer when the company raised $25 million of new capital as it shifted away from production development to sales and marketing.

"That Nasdaq listing fits with the geographic location of their markets and maybe a different investor appetite, but really it's rebounding, it's still below that IPO price," said Peter McIntyre, investment adviser at Craigs Investment Partners.

"There will be a number of investors thinking 'at long last' - most investors who've taken a holding in Ike would know that it's a high-growth stock, they'd be prepared for the ups and downs, but from a strategic planning point of view it looks rather positive."

IkeGPS is foregoing short-term profits to chase long-term international sales growth.

The company said its growth outlook for 2017 remains high, and it will build upon the momentum of multi-year revenue growth rates exceeding 100 per cent each year. That's based on predicted sales growth of its cloud-based IKE 4 product, which it said is "well positioned to grow existing customers and capture larger market share.

It expects to announce major new customers tied to fibre deployment projects across the US.

IkeGPS will announce its annual result on May 20.

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