ERD - ERoad. (Transport sector technology)

[ronaldson]

The market depth in this stock is currently suggesting a change in sentiment to the upside. If sellers can hold their nerve I think we will see some movement to at least the mid 70's and possibly even more by the time the half year results are announced.

The most compelling factor for this industry is that the shift to battery powered vehicles, whether fully or hybrid, surely means that road user charges must soon be introduced for all rather than some vehicles, to replace the present fuel tax regime. And that should give significant momentum to the suite of products ERoad provides in all jurisdictions, unless vehicle manufacturers can re-engineer to incorporate similar solutions at first instance which doesn't seem to be any sort of priority across the main producers just now.

One of the more interesting companies on the NZX in my view.

Trades at $0.73 this morning, and the market buy/sell side order book just now suggest this share will/has real potential to move higher, perhaps sharply so.

[winner69]

Eroad catching on …..talk AI publicly and share price rockets (at least in US)

Nice one ERoad

EROAD uses Microsoft Azure OpenAI to accelerate Product Dev


http://nzx-prod-s7fsd7f98s.s3-websit...453/408284.pdf

[winner69]

It working …mention you’re into AI and the market loves you

They should have tried that trick earlier

[ronaldson]

Trades at $0.73 this morning, and the market buy/sell side order book just now suggest this share will/has real potential to move higher, perhaps sharply so.

Precient. Yesterday I tried to double my position originally acquired at 70c on a 73c bid but didn't fill, so missed out on more of todays gains.

And I thought the NZX announcement this morning was mainly "puff" to support tomorrows result disclosure, but the market has really taken to it. Surely not too much of any recent green shoots can have flowed to the bottom line yet so that result could/should be on the disappointing side albeit the associated commentary may enlighten us as to future expectations.

I still say that this is one of the more interesting NZX listed entities given activity over the last two or three years. Perhaps not one to overlook just now.

[Sideshow Bob]

https://www.nzx.com/announcements/422578

Transportation technology services company EROAD Limited (NZX/ASX: ERD), with its purpose of ‘delivering intelligence you can trust, for a better world tomorrow’, today released its financial results for the 6 months ended 30 September 2023.

All numbers are stated in New Zealand dollars (NZ$) and relate to the 6 months ended 30 September 2023 (H1 FY24), unless stated otherwise. Comparisons relate to the six months ended 30 September 2022 (H1 FY23)

Financial Highlights1

•Revenue increased to $88.9m for H1 FY24 from reported revenue of $85.4m in H1 FY23 and normalized revenue of $78.4m in H1 FY23. This represents a 13% increase against normalized revenue for the prior comparable period, taking account of the one-off acquisition accounting adjustment of $7.0m in H1 FY23 relating to the Coretex merger. Growth in revenue was delivered across all markets.

•EBIT reduced to a profit of $0.4m in H1 FY24 from a profit of $1.0m in H1 FY23. Normalised2 EBIT increased to $1.9m in H1 FY24 from $(3.4)m in H1 FY23.
•Annualised Monthly Recurring Revenue increased by $10.8m (6.8%), to $169.1m in H1 FY24 from $158.3m in H1 FY23, reflecting growth across all markets partially offset by an FX loss of $4.4m.

•Free Cash Flow (to the firm) improved to an outflow of $0.2m in H1 FY24 from an outflow of $21.7m in H1 FY23. This improvement is the result of growth in units, price increases, and further cost savings. Following the capital raise, available liquidity (bank facility headroom + cash) was $59.4m.

Operational Highlights

•Asset Retention remains high at 94.2% in H1 FY24 (NZ 94%; AU 97%; NA 94%), compared with 94.7% in H1 FY23.

•Key enterprise customer wins and expansions during the period Programmed in Australia (+3k connections), renewed and expanded Boral (+1.3k connections) in Australia and Kinetic (owner of NZ Bus +1k connections) in New Zealand, and expanded US Foods (+600 connections) in North America. 59% of new enterprise units were expansions from existing customers, demonstrating strong customer value from EROAD.

•FY24 guidance reconfirmed of revenue growth between 6 – 9% ($175m - $180m), continued implementation of the cost-out program, and EBIT of $0 - $5m normalised for the 4G hardware upgrade program.

•Accelerated product development using AI – EROAD is collaborating with Microsoft on Generative AI product development to enhance customer experience and value. This is part of EROAD's growth strategy, which has included an active search for strategic partnerships in the high growth North American market and the building up of relevant in-market sales capabilities and expertise.

•Cold-Chain partnership – EROAD has also commenced a partnership with Trane Technologies to expand opportunities in the Cold-Chain market in conjunction with the ThermoKing Refrigerated Trailer Units. This partnership helps EROAD to grow in the refrigerated trailer market in NA which comprises over 400,000 trailers.

•EROAD expects to be free cash flow positive in the latter part of calendar 2024.

“Our results for the first half of FY24 demonstrate our ability to capitalise on strategic growth combined with our consistent focus on robust financial management,” said Mark Heine, Chief Executive Officer. “In March this year I outlined our focus was on repositioning EROAD’s business model to simultaneously reduce cost, drive growth and generate cash. Six months on, we are seeing delivery. We expect EROAD to start yielding positive free cash flow on a consistent basis in the latter part of calendar year 2024. The trajectory to arrive at this involves many specific milestones, and the Management team remains focused on these.”

EROAD Chair Susan Paterson said: “The half-year financial results show that EROAD is heading in the right direction. This progress is founded on a solid platform of an established, profitable New Zealand business segment balanced by a high-growth North America opportunity, a well-resourced balance sheet following our recent capital raise, a sound long-term strategy, and excellent positioning to the strong growth in business sustainability requirements. We have laid the foundations for continued growth in New Zealand and Australia, and to target high-growth opportunities in North America.”

1.EROAD has presented certain non-GAAP financial measures as part of its H1 FY24 results, which EROAD’s directors and management believe provide useful information as they exclude any impacts of one-offs which can make it difficult to compare and assess EROAD’s performance. The non-GAAP financial measures EROAD has used in this document are Annualised Monthly Recurring Revenue (AMRR), EBIT, Normalised EBIT, Normalised Revenue and Free Cash Flow. A detailed reconciliation of non-GAAP measures to EROAD’s reported financial information is included on EROAD’s website (http://www.eroadglobal.com/global/investors/). General information about EROAD’s use of non-GAAP financial information is included on page 2 of the H1 FY24 Investor Presentation.
2. Normalised for the recognition of one-off acquisition revenue, integration costs and costs associated with the 4G hardware upgrade program.
ENDS

[ronaldson]

There is a bit of underlying enthusiasm for this stock and it "popped" to $0.91 after the announcement but has since fallen back to $0.79 which is still higher than pre-announcement levels.

Given the "overhang" of stock that had to be hoovered up by underwriters at $0.70 in the recent capital raise this suggests purposeful retention subsequently rather than off-loading as the market permits.

The FY24 result next year should guide us as to how the future for ERD will be. Definitely NOT a sell in my view. I will hold, and if I get to feel brave any time soon may even accumulate.

[Rawz]

I thought it was a solid update. Super happy to see them almost self fund the things they do, I.e. no longer burning copious amounts of cash.

Close to cracking $200m revenue but still no profit. One day they will make money

[X-men]

Better take the profit .....before go back to 70c.....it is a long journey ..looking at the chart....many are looking to sell especially long term holders....

[Bikeguy]

Heavy with capital, fundamentals about to turn the bottom line green, EV road user aspect being discussed govt level, attractive acquisition prospect, maybe about to turn around…

[Bikeguy]

The underwriters have a fair idea on something I think….