EROAD Limited has posted a net profit before tax loss of $1.3 million despite a full year result of continual high growth, including revenue growth of 49% to $26.2 million.
NZ and Australia delivered a net profit before tax of $6.3m, up by 47% on last year.
Chief executive Steven Newman says the loss was the result of foreign currency movements, higher research, and development investment expensed rather than capitalised, and greater investment in the US business as the company prepares to meet the US-wide ELD opportunity.
Continued sales growth in the New Zealand market supported its increased investment in its US business. Total contracted units were 36,953, up by 43% on last year.
EROAD’s customer retention rate remains high at 97%, while future contracted income reached $48 million, up by 47% on last year.
Its clients continue to prefer renting units over buying them, with 92% of customers renting EROAD’s hardware rather than purchasing equipment outright.
The listed company now collects 34% of New Zealand heavy vehicle RUC, up from 29% a year ago.
Chair Michael Bushby says the board was pleased with the company’s continued progress towards a leadership position in the provision of road user charging and compliance services to the global heavy transport sector.
“We have continued to grow strongly in New Zealand while laying the groundwork for our next level of preparedness in the US in response to the new ELD regime which represents a substantial opportunity,” says Bushby.
“We are equally focused on investing to get our US business model ready to address significant possibilities in that market, and strengthening our New Zealand business where significant potential remains,” he says.
Newman says a highlight of the year was NZ Transport Agency’s approval of Ehubo2, EROAD’s second-generation in-vehicle device, as an Electronic Distance Recorder (EDR).
Two of the three approved EDRs in the New Zealand market are EROAD devices. Ehubo1 is now in more than 30,000 New Zealand vehicles.
“The Ehubo2 helps improve safety outcomes with a colour touchscreen display that delivers paperless RUC, real-time in-cab driver feedback and EROAD’s driver messaging service,” says Newman.
“Ehubo2 underwent a rigorous product testing and validation process in New Zealand, Australia, and the USA, covering more than 200 million kilometres,” he says.
“In keeping with our commitments to privacy and accuracy of all customer data, Ehubo2 is the only Electronic Distance Recorder in the world to meet international security standards including FIPS (Federal Information Processing Standards) 140-2 Level 3,” says Newman.
Newman says Ehubo2 is integral to the company’s continued growth plans in New Zealand, providing access to the lighter vehicle markets, where fleet operators are seeking to ensure they meet the new health and safety reforms that came into effect on 4 April 2016.
Further, Ehubo2 is in demand from existing Ehubo1 customers wishing to upgrade. At year end, EROAD had an order book of more than 1,000 units from existing customers seeking to upgrade to Ehubo2.
“Customers upgrading to Ehubo2 give EROAD the opportunity to re-deploy those Ehubo1s into fleets that we have historically not been able to access,” says Newman.
Other new products and services launched locally this year included driver behaviour safety features Drive Buddy, Driver Leaderboard and Driver Insight, and Safe Driving Rewards Programme, a collaboration with NZI and Lumley to provide user-based insurance to the heavy vehicle sector.
Newman says that EROAD enjoyed modest sales growth in Australia, mainly from New Zealand customers with operations across the Tasman and Australian operators looking for high-quality, secure telematics.
