7 Nov 2022

ERoad narrows revenue forecast after securing US clients

11:04 am on 7 November 2022
10069448 - vivid yellow truck in motion under bright sun on a highway

ERoad offers devices and software used by transport companies to track driving hours, maintenance and health and safety compliance. Photo: 123RF

Transport software company ERoad has narrowed its revenue forecast as it continues to battle shortages and rising costs.

In a market update it said it had signed up a new client in the US and had a contract renewal with another big truck fleet operator.

Chief executive Mark Heine said the company was now expanding on the back of its takeover of another transport technology company Coretex.

"With our expanded portfolio of products and capabilities, from the merger with Coretex, we are now beginning to convert our pipeline to sales and continue to retain key customers in the challenging and competitive North American market."

ERoad has developed and sells software used by trucking companies to manage their vehicle fleets, drivers' hours, and maintenance.

It said it had signed up a new US customer Sysco, a food service company with 9000 trucks, while existing customer ABC Supply had renewed its contract for 6000 vehicles for at least another two years.

It narrowed its revenue guidance to a range of $154 million to $164m from the previous $150m - $170m range, and maintained its normalised pre-tax earnings guidance breakeven to $5m for the current financial year.

It said it was still feeling various cost headwinds, which they were countering through cost reductions.

"Cost reduction initiatives will reduce the impact of inflationary pressures and will reflect in improved performance in the second half of FY23," Heine said.

"EROAD continues to experience disruption in its global supply chains, including access to supply of critical electronic componentry and increased prices. This is being actively managed through longer purchasing lead times, increased inventory levels and strong supplier relationships."

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