IQGeo Group plc
(the "Company" or the "Group")
IQGeo Group plc (AIM: IQG), a leading developer of geospatial productivity and collaboration software for telecoms and utility network operators is pleased to announce an update on current trading following the close of the Company's first half ended 30 June 2020.
The Company expects to show first half year-on-year growth in IQGeo product orders of more than 100% and totalling £5.4 million (2019H1: £2.5 million). IQGeo's strategy of converting the business to a recurring revenue model continues to show positive momentum with 90% of new software orders taken as subscriptions.
IQGeo's international market expansion produced the Company's most significant order, worth £1.8m in total, which was received from TEPCO, Japan's largest electricity utility where IQGeo's software will form the core of its emergency response systems. Additionally, IQGeo received a substantial expansion order from one of Canada's largest telecoms operators for £0.7m where IQGeo software is being deployed to the bid and construction management teams. Both orders came from customers acquired in 2019 and further demonstrates IQGeo's ability to rapidly expand the number of users at individual accounts thanks to its compelling return on investment business cases ("ROIs") and high user satisfaction levels.
Revenue for the first half is expected to exceed £4 million (2019H1: £3.6 million) reflecting an improved mix of IQGeo product revenue in excess of £3 million (2019H1: £2.4 million) and a relative stabilisation of non-core Geospatial revenue. The improved revenue mix in favour of software, together with certain cost management steps, has had a beneficial effect on gross margins which we expect to exceed 45% (2019: 34%).
As at the period end, the Board expects to report net cash of £11.2 million which has been managed through a series of cautious cost controls in the light of the economic uncertainty created by the Covid-19 epidemic.
IQGeo's strategy is to continue developing its product for telecoms and utility customers in North America, Europe and Japan with the goal of making its software functionally rich, mobile-first and fully cloud enabled. As part of its continued global expansion, IQGeo will continue developing its channel capabilities by appointing selected regional partners with strong geospatial capabilities and high levels of market access. Additionally, IQGeo will continue investing in its digital marketing capabilities which have underpinned the positive results in H1 despite the Covid-19 lockdown in its core markets.
IQGeo sees continued market demand reflecting the fact that both telecoms and utilities markets have been less affected than other sectors during the Covid-19 epidemic. The ROI outcomes around productivity and safety that IQGeo software solutions can generate for its customers remain highly relevant for its target markets which will result in continued investments in mobile and cloud enabled geospatial solutions.
While the market fundamentals remain positive, we continue to remain vigilant and to manage our investment levels appropriately to enable us to manage the ongoing global concerns driven by Covid-19.
The Company expects to announce its results for the 6 months ended 30 June 2020 towards the end of September 2020.
Richard Petti CEO said "I am pleased our order book has continued to grow despite the epidemic related economic uncertainty. The subscriptions focus together with our cautious approach to costs is improving our margins and operating cash results which show that we can convert customer success into an attractive business model."
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information contact:
IQGeo Group plc +44 1223 606655
finnCap Ltd +44 20 7220 0500
Henrik Persson, Matthew Radley (Corporate Finance)
Tim Redfern, Richard Chambers (ECM)
Tulchan Communications LLP +44 20 7353 4200
James Macey White, Matt Low, Deborah Roney
Notes to Editors
IQGeo™ (AIM: IQG) a leading developer of geospatial software that improves productivity and collaboration across enterprise planning, design, construction, maintenance and sales processes for telecoms and utility network operators. Our mobile-first enterprise solutions create and maintain, an accurate view of complex network assets that is easily accessible by anyone, wherever and whenever needed. Specialized applications combined with our open IQGeo Platform help network operators create a single source of network truth to meet their digital transformation ambitions and operational KPIs. Our award-winning, cloud-enabled solutions save time and money, and improve safety and productivity, while enhancing customer satisfaction. Headquartered in Cambridge, with offices in Denver, Frankfurt and Tokyo, we work with some of the largest network infrastructure operators in the world. For more information visit: https://www.iqgeo.com/
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