Steven Newman’s fleet tracking technology company, Eroad, says it wants to take advantage of “unbounded opportunities” in the US trucking market before thinking about dividends.
The transport technology company posted full-year earnings before tax (ebitda) of $15.6 million, up 48% from $10.5m in 2018. It also boosted revenue to $61.4m, with Revenue for its New Zealand operations up 28% to $45m while in the US revenue rose to $15.6m, up 114% from the 2018 year.
Despite a lack of dividends in the short term, the mood at Eroad is bullish, the company even saying it had made no provisions for a claim brewing during the March year that it had infringed on the patents of a third party.
It noted the claim as a contingent liability in its 2019 annual report, which showed strong earnings and revenue growth.
Newman said this year the company built a solid platform for future growth.
“We’ve made significant progress implementing the investment programme set out in the strategic plan approved at the time of capital raise, ensuring we can scale efficiently, improve our customer experience and provide greater operating leverage.”
Eroad boosted its R&D spend in the year, as it seeks to broaden its product offering, support a re-launch in the Australian market, and enhance its suite in North America. Expensed R&D costs rose to $5.1 million from $4.5 million, and capitalised R&D costs were up at $8.3 million from $6.8 million.
Listed on the NZX in 2014, Eroad has endured something of a bumpy ride in recent times as it struggled to break into the critical US market. However, a 2017 federal government mandate requiring all interstate trucks above 10 tonnes to be equipped with an electronic logging device or ELD has changed the game.
Newman is no stranger to transport technology success. Along with Peter Maire, he co-founded Navman, which became a global brand before being sold to the US firm Brunswick Technologies in 2003/04 for $108m. According to Companies Office records, Newman held a 5% stake before the sale.
2018: $50 million