GeoOp cuts annual underlying ebitda loss to $1.9m

AUCKLAND: GeoOp, the workforce management app developer, narrowed its fullyear loss before interest, tax, depreciation and amortisation and expects strong revenue growth to continue this year.

The Aucklandbased company said the underlying ebitda loss was $1.9 million for the year to June 30, compared with a $3.4 million loss in the previous year, due to reduced costs and material increases in annualised recurring revenue. Total revenue was $4.2 million, up from $4.1 million in the previous financial year.

GeoOp reported a net loss of $8.7 million, including a $5 million noncash impairment of GEOsales intangibles as well as $700,000 of oneoff costs linked to its failed bid to list on the Australian stock exchange and associated restructuring costs.

In line with earlier guidance, revenue growth was expected to exceed 30% in the current financial year and it expected to generate a positive ebitda run rate halfway through the 2019 calendar year, it said.

‘‘The distraction of the ASX IPO process and management changes are now behind us. We are implementing strategies to achieve a minimum of 30% revenue growth in the current financial year and are now seeing sharply improved results,’’ chairman Roger Sharp said.

The Aucklandbased company quit a planned float in Australia when it reached an impasse with the ASX over a series of restrictions. It then opted to remain in New Zealand and migrate from the NZAX to the main board.

Annual recurring revenue (ARR) was $4.8 million at the end of June, 24% higher than in December 2017. The rise was largely due to existing customers moving to subscription pricing at current market rates. Monthonmonth ARR growth averaged 4.5% in the final four months of the year to June 30.

‘‘We are very pleased with the progress we have made transitioning our customers on to the new subscription pricing,’’

While moving legacy customers to new subscription pricing would lead to a reduction in licence numbers, ‘‘GEO is focused on profitable growth and requires its licences to generate a positive contribution at market prices’’, he said.

The company said the GeoSales business had been perfor ming below its potential due to the company focusing on its GeoService product during the 201718 financial year.

‘‘GeoService saw subscription revenues in the year to June increase 20.8% from the same period a year ago to $2.5 million, while GeoSales annual subscription revenue was down 12.5% to $1.4 million,’’ Mr Sharp said.

The company was executing a plan expected to see GeoSales return to growth in the 2019 financial year.

Customer acquisition was modest in the 2018 financial year and this trend had continued into the new financial year. However, it expects enhancements to its digital marketing and new channels to drive growth in customer numbers and licenses in the second half of the 2019 financial year.

The company also said its monthly cash burn continues to improve and is averaging around $120,000 a month at present.

The stock last traded at 17c, was unchanged yesterday and has shed 60% over the past 12 months.