New Zealand Fleet Tracking Company Eyes Australia and U.S. Expansion
ERoad, which provides electronic fleet tracking and road user pays management services, may eye acquisitions in Australia and the U.S. once it completes an initial public offer of up to $49.5 million next month, according to BusinessDesk.
The Auckland-based company said wants to raise $40 million in new capital to spend on expanding its U.S. operations and Australian base, according to the report.
The company launched commercial services in Oregon, in April on the invitation of the state's transport office, according to the BusinessDesk report. The U.S. state is looking to introduce light vehicle mileage tax in a shift away from fuel tax used to fund roads and highways, and was the first in the world to develop a road user charge tax, or vehicle miles traveled tax, which New Zealand has adopted for heavy vehicles.
Founded in 2009, ERoad provides a nationwide GPS-based road user charge system. The company has recorded rapid year-on-year sales growth, and first turned a profit of $2.9 million in the year ended March 31, 2014, on sales of $10 million. It forecasts revenue to rise to $19 million in the 2015 year and to $34 million the following year, according to the prospectus. Eroad expects to report a loss of $1 million in 2015 due to listing costs of $2 million, before returning to profit of $5.5 million in 2016. ERoad is also predicting a drop in its retention rate, from 99.3 percent to 96.5 percent over the next two years, according to the BusinessDesk report.