Portable measurement device manufacturer IkeGPS has bought forward its break-even forecast to the end of next year and is considering a listing and capital raising on the tech-heavy Nasdaq board, of the New York Stock Exchange.
Wellington-based developer of geolocation and measurement devices, IkeGPS listed on the NZX in July 2014, following an initial public offering at $1.10 per share, which raised $25million. Its shares spiked more than 33% to 88c yesterday on the news, but remained down more than 16% on a year ago.
In a market update yesterday, chief executive Glenn Milnes said IkeGPS' business plan was to be cash break-even by the fourth quarter of full year 2017, which was sooner than previously projected.
‘‘Growth outlook for full year 2017 remains high, building upon the momentum of multi-year revenue growth rates exceeding 100% per annum,'' he said.
Forsyth Barr broker Lyn Howe said while the business plan was for break-even next year, the question was what that meant for growth expectations.
‘‘Ike has stated it expects to continue high growth in full year 2017, [but] without providing a growth number,'' she noted.
‘‘The market will view this news positively. However, this will also mean a review of medium-term revenue growth expectations as well,'' she said.
Mr Milnes said cash in hand at the end of the full year 2016 was about $5.3million, and under the 2017 business plan the board was ‘‘comfortable with the capital structure at this time''.
He said the rationale behind a potential Nasdaq listing was that using proceeds from a Nasdaq capital market initial public offering would deliver a higher growth and higher profitability outlook for full year 2018, and beyond.
Craigs Investment Partners broker Peter McIntyre was not surprised by the potential for a Nasdaq listing, given IkeGPS' contracts and marketing to date in the US.
There could potentially be an issue of new shares, which could dilute existing shareholders' stakes, or some of the 54.5% of the company that was not sold in the New Zealand listing could be put up on offer on the Nasdaq, he said.
Mr Milnes said a Nasdaq listing would support IkeGPS' focus on developing its in-market presence with US customers and partners, and the company was making progress to complete pre-listing requirements, he said.
Mr Milnes said large utility sales contracts remained ‘‘lumpy'', but the next generation, subscription-based IKE 4 product was well positioned to capture a larger market share, estimated to be an ‘‘addressable opportunity'' of $700million.
He said IKE ‘‘imminently expects'' to announce major new IKE 4 customers tied to Google Fiber deployment projects across the US.
Last October IkeGPS announced a ‘‘development agreement and strategic partnership'' with In-Q-Tel, a non-profit, strategic investment firm which seeks new technologies for the missions of the US intelligence community; prompting a 25% share spike at the time.
IkeGPS combines measurement software and cameras, lasers, computing, GPS, and 3-D-compass components into one device, including for smartphone and tablet applications, which lets users capture real-time measurements, geolocate remote objects and then make measurements and models from the photographs.
●IkeGPS is expected to release its full-year result on May 20.
