The Wellington based developer of portable geolocation and laser measurement devices is also taking a separate share purchase plan to existing shareholders, seeking a further $3 million, also offered at 60c per share, which is a 13% discount on recent trades.
While IkeGPS saw revenue up almost 130% to $9.2 million for its year to March, and gross profit up 115% to $4.5 million, it booked an increased after tax loss of $8.8 million, reinvesting back into North American growth.
Cash in hand at March stood at $5.3 million.
Forsyth Barr broker Lyn Howe said it had noted for some time IkeGPS would require additional cash to support its growth aspirations.
"This funding will be used to support continued expansion ... for working capital and development of new applications," she said.
Craigs Investment Partners broker Peter McIntyre said IkeGPS would find it easier to secure funding outside New Zealand, as it was after a larger pool of investors, including a dual listing on the ASX.
"Ike’s wanting a greater diversity of investors and a larger pool of institutionals ... to may be take more risks than New Zealand investors would," he said.
Mrs Howe said concerns had been highlighted about IkeGPS’s future cash requirements, if it was to deliver on revenue growth, and there "remains significant uncertainty" around its future sales profile, pushing into new markets and sectors.
"A strong cash balance, assuming the [$3 million] share purchase plan is completed, will provide some time to prove up those opportunities," Mrs Howe said.
