New Zealand-based tech company Ikegps Group Ltd (ASX: IKE) might still be flying under the radar for many investors. But with this ASX tech share shooting up by more than 65% in the past year, the company may now be starting to attract some attention.
At Friday's close, Ikegps shares were trading at $1.095, not far off the 52-week high of $1.24 they briefly hit last November.
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Company background
Ikegps is a niche company specialising in software and hardware measurement tools. It uses laser technology to capture geospatial data, including an object's height, width and distance. At first glance, this might seem like too specialised a product offering to be profitable, but this sort of technology is crucial to the design and implementation of large infrastructure and utility projects.
In fact, Ikegps already has contracts with a number of US telecommunications giants, including AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ). The company's measurement technology helps these customers build and maintain their networks.
Recent financials
Ikegps released its FY21 report earlier this month (covering the 12 months ending 31 March 2021). Business headwinds stemming from the COVID-19 pandemic meant that revenues declined slightly year on year – from NZ$9.8 million in FY20 to NZ$9.3 million in FY21. Gross margin also declined, from NZ$6.9 million in FY20 to NZ$5.9 million in FY21, and the company blew out its net operating loss after tax from NZ$6.1 million to NZ$7.4 million.
Despite the subdued financial performance, Ikegps claimed it has laid a solid foundation for growth, citing a strong sales pipeline, healthy balance sheet, and a wide-ranging product suite. And there were some silver linings buried in the financial results. Ikegps closed a record number of new contracts in the fourth quarter of FY21, and that momentum seems to have carried over into the first few months of FY22.
Ikegps closed contracts worth a total of NZ$5.4 million in the last quarter of FY21, with most of that revenue expected to be recognised during FY22. In the first eight weeks of FY22, Ikegps closed contracts worth a further NZ$3.4 million, meaning it is almost on track to deliver back-to-back record quarters.
Other news
Last Wednesday, the company announced another set of material contract wins. Ikegps extended an agreement with an engineering company involved in the development of telecommunications infrastructure, and also signed a new contract supporting a separate network project in the US. Ikegps will be hoping that the recent contract wins are the first signs of a sustained increase in demand from North America as their economy emerges from the pandemic.
Ikegps share price snapshot
As well as its impressive gains over the past 12 months, the Ikegps share price has also rallied by more than 19% over the past month. Based on its current valuation, this ASX tech share has a market capitalisation of around $146 million.
