Eroad accelerates US growth after signing its first major customer there
Logistics and fleet management technology company Eroad expanded fourth-quarter sales volumes at an accelerated pace and says it expects to continue growing at a similar rate as in the year ended March.
Sales rose 6 percent, or by 5,775 units, to 96,390 in the three months ended March. Volume growth was almost evenly split between the Australasian market and North America where unit sales rose 13 percent, or by 2,885 units to 22,059.
The latter was up from 5.3 percent, or 1,104 units, which took the company-wide gain in the December quarter to 4,375. The March quarter marked the fastest quarterly growth this financial year.
“Total contracted unit growth in North America was bolstered in Q4 by the commencement of units being rolled out to our first US enterprise customer,” Eroad says.
That new customer, which is unnamed, was announced on March 1 when Eroad said it is one of the largest privately-owned fleets in North America. The master supply agreement covers about 4,900 Eroad units, which the company said would mostly be installed during the year beginning this month.
Eroad says new sales to small and medium-sized business customers remains “solid” and that it considers a significant addressable market remains in both heavy and light commercial vehicles across New Zealand, North America and Australia.
The company has just re-launched in Australia and says that country didn’t provide a meaningful contribution to unit growth in the year ended March, “reflecting the expected lag between launch and contracting of sales.
“The decision to re-enter the Australian market has been validated by a strong sales pipeline that will be reflected during full-year 2020.”
The unit growth in New Zealand eased a little from 5 percent in the third quarter to 4 percent.
Eroad shares ended yesterday at $2.60 and have lifted from their record low at $1.95 since the announcement of the large US customer. They are still languishing below their 2014 $3 float price.
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