IQGeo Group Plc (LON:IQG) has said it expects to report “significantly reduced” full-year losses following what it said was “good growth” in its key metrics and a considerable improvement in its margins.
In a trading update for the year ended December 31, 2020, the geospatial software group said revenues are expected to be no less than £9mln, up from £7.8mln in the prior year, while its adjusted (EBITDA) loss is forecast to narrow to £2.5mln from £4.8mln.
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IQGeo highlighted predicted growth of 30% for its own product revenues, adding that product orders have expanded 42% and that its strategy of converting the business to a recurring revenue model is continuing to show “positive momentum” with 35% of revenues now recurring compared to 21% in 2019.
Meanwhile, the company said its margins have also “improved considerably” and are expected to exceed 50%, up from 42% last year, while the firm said it ended the year with net cash of £10.5mln.
Looking ahead, IQGeo noted that it is continuing to see “strong market demand”, which it said reflected the fact that both the telecoms and utilities markets have been less affected than others by the coronavirus (COVID-19) pandemic, and that the return on investment from its software to customers meant it remains “highly attractive” in its target markets.
"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”, IQGeo chief executive Richard Petti said in a statement.
“The strong balance sheet at the year-end, significantly increased annualised recurring revenue exit run rate, closing order book of approximately £8.2mln (2019: £5.1mln) 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", he added.
Shares in the company jumped 9.6% to 103p.