18 January 2021
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 provide an update on the Group's trading for the year ended 31 December 2020 ahead of the release of its final results in March 2021.
The Group expects to show good growth in all key metrics. Revenue for the year is expected to be not less than £9.0m (2019: £7.8m) with IQGeo own product revenue expected to grow by approximately 30% to more than £7.0m (2019: £5.5m). Own product orders have grown by 42% to £10.7m (2019: £7.5m). The strategy of converting the business to a recurring revenue model continues to show positive momentum and approximately 35% of total revenues are now recurring, up from 21% in 2019. ARR run rate as at December is expected to be around £5.3m, up from £2.0m in 2019. The increase in ARR has been driven by organic growth of c.65% for the IQGeo business and a £2.0m uplift from OSPI, which was acquired in December.
Gross margins have improved considerably, driven by the mix of revenue and are expected to exceed 50% (2019: 42%). As a result of these improvements and a disciplined approach to costs whilst maintaining investment for future growth, the Group expects to report a significantly reduced adjusted EBITDA loss of c. £2.5m (2019: loss of £4.8m).
The Group had net cash of £10.5m at the year end, with gross cash of £11.1m including the US Government PPP loan, the repayment of which is expected to be waived. The cash balances are before the receipt of £2.5m from the sale of the residual interest in the Group's former RTLS business, as already announced.
Following the acquisition of OSPI last month, integration activities covering the business, products and operations of OSPI have commenced. All staff have already been transferred and it is expected that the OSPI legal entity, OSPI Inc, will be merged into IQGeo America Inc effective February 2021.
IQGeo sees continued strong 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's modern software solutions can generate for its customers remain highly attractive for its target markets.
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.
Richard Petti CEO said:
"The results for the year are very positive and show considerable progress as we continue the journey of building a high recurring revenue software business. The strong balance sheet at the year end, significantly increased annualised recurring revenue exit run rate, closing order book of approximately £8.2m (2019: £5.1m) and positive trading momentum during 2020 will be added to by the recent acquisition of OSPI and funds from the disposal of the remainder of the RTLS business and will enable us to enter 2021 with confidence."
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)
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/