EROAD has grown its revenue to $12.2 million for the half year, up 55% on the same period last year, as the company continues to expand its operations in New Zealand, Australia, and the North American markets.
Total contracted units totalled 31,298 at 30 September 2015, up 58% from 19,864 at 30 September 2014.
“I am pleased with what has been achieved operationally during the six months. To have continued to grow while adding a further 30 staff, including building our R&D teams illustrates the environment EROAD has created,” says EROAD chairman, Michael Bushby.
While sales were slower than anticipated in North America, the shortfall was made up for in New Zealand/Australia. With rental units now making up 91% of total unit sales, future contracted income climbed to $47 million on 30 September 2015.
EROAD’s launch of some new services, as well as enhancements to its platform, were the reasons supporting the revenue growth. These services utilise the EROAD platform’s online, in-cab and mobile capabilities.
It also launched its next generation in-cab unit, Ehubo2, in New Zealand, enabling additional services such as EZmessage and Drive Buddy, which help customers improve both commercial and health and safety outcomes.
In Oregon, EROAD says it accepted slower WMT sales growth to complete a reorganisation of its business to address significant opportunities earlier than anticipated. It re-positioned some of its sales team into neighbouring states, established an indirect sales channel, and brought forward R&D on new services.
“While this contributed to lower revenue in Oregon, we are satisfied it is in the best interests of EROAD in the long term,” says EROAD chief executive Steven Newman.
Newman says he will be basing himself in Portland, Oregon for the next six months to support EROAD’s management, training and sales focus in North America.
EROAD has collected $834 million in RUC since 2009 and is now collecting 31% of New Zealand’s total annualised Heavy Vehicle RUC, up from 26% at September 2014.
While RUC was the main driver of demand in the early years, customers are increasingly seeking solutions to other compliance needs, especially in the area of health and safety. EROAD has continued to expand its services, specific to industry, business or vehicle type, and these are contributing to the company’s continued growth.
EROAD has a range of new developments it intends to release in the coming months, to leverage its next generation Ehubo2.
Although sales in Oregon have not grown as quickly as the company would have liked, it is worth noting that, after 18 months in the North American market, EROAD’s sales are some 90% ahead of New Zealand sales at the equivalent point of market entry in New Zealand.
“We are satisfied we have proven there is a market with 306,000 heavy vehicles registered for Oregon WMT,” says Steven Newman.
“We expect the Oregon-based business to grow consistently in the coming years, particularly when the FMSCA ELD mandate is published, which will provide more certainty to the transport industry when making technology decisions,” says Newman.
“More than 200,000 of the 306,000 heavy vehicles registered for Oregon WMT are based outside Oregon, many in the neighbouring states.
“We have replicated, initially in a small way, our direct sales model into two neighbouring states, Washington and Idaho. Our focus for the coming six months is to get the direct sales model working effectively such that our sales teams in each state are delivering efficiently.”
EROAD’s indirect sales channel focuses on partnering with larger networks serving transport fleets, such as transport service companies, fleet lease companies and insurance companies.
“I will be spending considerable time with our newly established indirect sales team to ensure we build an effective sales pipeline,” says Newman. “Many of the opportunities addressable in this way involve larger transport fleets.
“By year end, with the FMCSA ELD mandate published, we plan to have an established footprint of four sales teams, Oregon, Washington, Idaho and Indirect Sales, to provide us better access to the North America-wide IFTA and ELD/Electronic Logging Service (ELS) opportunities,” says Newman.
