IKE - IKE GPS Group

[Left Field]

Today's investor seminar v positive (as indicated by today's results.)

Some highlights:

1.) IKE's Product Council (which includes representatives from 14 of the biggest USA utility companies) is continually helping IKE to identify new products and services
2.) Their new Pole Foreman now has 110 customers (50 new and 60 converting from old model)
3.) Electric vehicle, data centres, and need for improved fibre optics means the USA overhead pole infrastructure needs to double in size by 2050.
4.) IKE's Gross Margin now at 68% an improvement of 10% over last period, and further improvements likely.
5.) IKE still adding large new customers every week as it becomes the accepted 'industry standard' software.

[Minimoke]

Ahh - this is a traders perspective.

My question was not whether it is possible to make money with a stock where the SP is jittering enough. Of course, anybody can do it with either insider knowledge, good TA or just good luck.

My question was - what is the plan for the company to break even - i.e. reaching the point where their revenue is higher than the sum of all of their costs.

But I realize, this is more an investor type question.

Notice I didn't mention my "Sells". Because there are none.

As has been mentioned before the company could break even if it wanted to stop spending on research and marketing. So clearly their plan is to increase market share to the point a surplus profit is made and a return to shareholders.

[Minimoke]

A couple of big trades today. No. It wasnt me buying more.

[BlackPeter]

Fine. I'll ask him for you. Then at least you'll have an answer.

No need to ask him for me. But assuming you hold - ask him for you and any other shareholder. You are the gals who need to know.

[BlackPeter]

Notice I didn't mention my "Sells". Because there are none.

As has been mentioned before the company could break even if it wanted to stop spending on research and marketing. So clearly their plan is to increase market share to the point a surplus profit is made and a return to shareholders.

Lets hope they have an a bit more tangible plan. If its just to "increase market share to the point a surplus profit is made and a return to shareholders"- at which stage would you deem them to be either successful or not? After 5 years, 10 years, 20 years, 50 years? Just in case anybody barking at these numbers - I think PEB just celebrated their 20'th anniversary of sucking money out of their shareholders without ever delivering. I hear their supporters (shareholders) are still quite happy and no doubt prepared to fund further decades. Clearly - they could be lucky at some stage, couldn't they? Quite an achievement.

On the other hand - some churches / religions are doing the same thing for millennia without ever having to deliver to their supporters, so - maybe - I might be a bit harsh with some of these startups ...

[Untamed]

I have emailed Glenn, so will post back when I hear from him.

I understand where you are coming from BP, but right now, that isn't my focus as an investor. As long as I am seeing continued improvement and growth, in terms of a growing customer base, closed contracts, and the company working hard to expand into huge potential market, I am happy for now. This result shows that they are achieving that. Glenn has said it before, and he said it again today, that the electricity sector in particular, is very conservative, and very cautious, when it comes to change. That doesn't surprise me one bit, given they are a mission critical industry, and can't afford any f**k ups. Of course they want to be 100% sure about a product/service, before committing to it. But as Glenn said, once they get their foot in the door with these companies, they see the benefits IKE provides, and eventually expand their contracts. So from that perspective, there is an element of "waiting game" for IKE, as there also is with transaction revenue. Glenn mentions "timing" often, and it isn't him making excuses. It is simply the nature of the electricity and probably the telecommunications industry too. Patience is needed. They are not going to win customers by pressuring them.

I don't actually need to know the answer to your question right now, because it isn't my focus as an investor at the moment. Growth of the business is more important to me for now. Of course, at some point, I will expect to see them turn a profit, as much as the next guy, but I as long as things keep ticking along as they are, I can wait a year or two longer if necessary.

I am no expert as you well know, but I no longer consider IKE a "start up" company. I think they are well established, and "well positioned" for a very succcessful future. And you know what? I really like that they are still a Kiwi company. Glenn is down to earth, no frills, typical Kiwi bloke, and the fact that he is still heavily involved in all aspects of the business, is a positive for me. Having a Kiwi bloke at the helm of the company makes a difference, for me anyway.

No need to ask him for me. But assuming you hold - ask him for you and any other shareholder. You are the gals who need to know.

[Greekwatchdog]

Today's investor seminar v positive (as indicated by today's results.)

Some highlights:

1.) IKE's Product Council (which includes representatives from 14 of the biggest USA utility companies) is continually helping IKE to identify new products and services
2.) Their new Pole Foreman now has 110 customers (50 new and 60 converting from old model)
3.) Electric vehicle, data centres, and need for improved fibre optics means the USA overhead pole infrastructure needs to double in size by 2050.
4.) IKE's Gross Margin now at 68% an improvement of 10% over last period, and further improvements likely.
5.) IKE still adding large new customers every week as it becomes the accepted 'industry standard' software.

Thanks for the info.

Was there any info on opportunites with in regards to the LA Fires or to a change in thinking in the US with the recent change of Govt.

My own thoughts is if they keep winning clients then sooner or later one of the bigger US players may make a play for IKE. Easier to get their products and IP given the suit they offer and the fact they are working so closely with the clients. Wouldn't be an expensive takeover given the exchange rate is so favourable for them.

DISC: Hold and don't want to see another NZ Software company taken over so cheaply

[Left Field]

Thanks for the info.

Was there any info on opportunites with in regards to the LA Fires or to a change in thinking in the US with the recent change of Govt.

Yes brief mention...... they currently have a San Diego utility as a client and are in talks with 2 other large Californian ones. They sounded hopeful/optimistic.
No mention of any changes or issues with the new US administration.

[Mad Goat Keeper]

It's hard to figure just how much of the industries spend is capturable by IKE. 8 of the 10 largest companies are customers, but what % of those company's engineering spend is heading IKEs way? Does anyone know what figure is actually applicable to engineering within this 50bn sector spend?


I've been looking at CAD software company's for comparisons and the major players seem to have some staggering  company valuations. I know its not quite apples for apples but maybe more similar than comparing xero.

If you're talking potential takeovers then oracle would seam a likely fit and just happen to have an ex employee as one of the independent directors... or would graphisoft or auto desk be more likely suitors? Personally though I hope to see it remain in its current ownership form.

I'm becoming more and more confident we're hitting an inflection point and things are coming together nicely.

[Greekwatchdog]

For Bars review for those interested

keGPS (IKE) released a solid 3Q25 trading update for the period ending 31 December 2024. Total revenue is tracking +21% ahead of FY24. IKE's year-to-date gross margin dollars grew +42%, and gross margin percentage (at 68% and up from 58% in the pcp) continues to improve, reflecting the mix-shift towards higher-margin Subscription products and gross margin expansion in the division. Cash rose +NZ$1.2m over the quarter to NZ$9.2m, despite ongoing investment in product development. IKE has +NZ$4.4m of net receivables and no debt, substantially reducing the likelihood of needing to raise additional capital for operational purposes. Management indicated during the update call that it expects cash levels to strengthen further over 4Q25. IKE maintained its FY25 guidance for total Subscription revenue to grow by ~+40% or greater compared to the prior year. We retain our NZ$26.7m FY25 total revenue estimate, representing growth of +24% on FY24, but note this requires a strong 4Q25 trading performance. Our blended spot valuation rises +5% to NZ$0.87.

What's changed?
�������Spot valuation: Our blended spot valuation rises +4cps to NZ$0.87, on a re-rate in peer multiples.
Operationally showing good progress
FY25 year-to-date revenue is NZ$18.5m, up +21% year-on-year, while ��3Q25 revenue was NZ$6.3m (+31% versus the pcp). For FY25 to date, gross profit is NZ$12.6m, up +42% versus the pcp, and gross margin percentage was 68% over the nine months or 70% in 3Q24. Recognised revenue included NZ$10.2m from Subscriptions (+29% vs pcp), NZ$5.8m from Transactions (+14% vs pcp), and NZ$2.5m from Hardware and other services (+9% vs pcp). IKE added seven new enterprise customers over the quarter to now have 443 in total (420 of which are Subscription customers).

Outlook—substantial tailwinds remain for 4Q25
On the outlook, management said: 'our North American-based team continues to capitalize on significant sales opportunities'. IKE's exit run rate of annual platform subscription revenue grew to NZ$15.7m (+43% vs pcp). The outlook for 4Q25 remains promising, with growth expected across both the Subscription and Transaction segments. IKE retained its FY25 forecast for Subscription revenue to grow by ~+40% or more, particularly driven by PoleForeman and now helped by a weak NZDUSD cross rate. A supportive industry environment, including: (1) ongoing grid resiliency programmes, (2) Trump's promised support for growing electricity production to support AI investment, (3) IKE's new AI-driven capabilities, and (4) cost efficiencies, positions the company well.

Peer multiple discount now looking outsized given the opportunity set in front of IKE
The Nasdaq Emerging Cloud Index median EV/Sales multiple is now sitting at ~5.4x EV/Sales (see Figures 9 and 10). Global sector optimism from a Trump government has aided sentiment. IKE trades at 3.5x our FY25 revenue estimate. Optimism in IKE's peer group from the Trump re-election sees our market-based EV/Sales multiple-driven valuation rise to NZ$0.90, +48% above the share price.

[Greekwatchdog]

There you go...Takeover..$1.00 not enough

ikeGPS Group Limited (IKE) (NZX: IKE / ASX: IKE) advises that in late 2024 it received an unsolicited, confidential, non-binding approach from a large, credible private equity group ("Potential Acquirer") to potentially seek to acquire IKE.

Following negotiations, entry into a short period of exclusive due diligence, and soundings under confidentiality & stand-still agreements from several major shareholders, IKE considers that the Potential Acquirer's final offer of approximately NZ$1.00 per IKE share representing an approximately +62% premium to IKE's share price as of 5 February 2025, has no realistic chance to secure sufficient support from shareholders to effect a scheme of arrangement. Accordingly, IKE has discontinued discussions with the potential acquirer.

Further details:
+ IKE was approached, on a confidential and non-binding basis, by the Potential Acquirer, about the acquisition of 100% of IKE's shares, to be effected by way of a scheme of arrangement. The proposal was conditional on a number of material matters including the Potential Acquirer undertaking detailed due diligence.
+ After seeking appropriate advice from its legal and financial advisers, the Board of IKE assessed that the indicative valuation range presented by the Potential Acquirer was sufficient to justify granting this short period of exclusive due diligence with a view to the Potential Acquirer providing a subsequent firm offer that was sufficiently compelling to justify putting before all of IKE's shareholders.
+ The firm offer from the Potential Acquirer was received late-January. This equated to approximately NZ$1.00 per IKE share, an approximately +62% premium to IKE's current share price. This equated to an enterprise value of approximately NZ$165-170m.
+ The current construct of IKE's share register is such that without the key support of its largest few shareholders, no takeover transaction can be successful. Having undertaken direct, confidential discussions, under stand-still agreements from these specific shareholders, IKE's Board determined that a transaction at this price has no realistic chance of securing sufficient support.
+ IKE's Board therefore concluded that continuing to devote resources and incurring the very significant costs to progress this specific process would not be in the best interests of the Company and its shareholders and has accordingly ceased discussions.

IKE continues to focus on its growth strategy targeting the delivery of distribution network software for the North American and other international electric utility and communications markets. The IKE Board considers that the Company's delivery of this strategy will support the valuation expectations of its shareholders in the medium term. IKE also believes that the increasing levels of M&A activity in this space is being driven by the multi-decade market tailwinds tied to the requirement to increasing electrical grid resilience and capacity.

[Left Field]

Tyre kicking offer.....happy IKE said no.

[Greekwatchdog]

Tyre kicking offer.....happy IKE said no.

I wonder what they think its worth before they present any offer to shareholders.

[Left Field]

I wonder what they think its worth before they present any offer to shareholders.

Should bounce north of 80c today...... I reckon the Board would not be interested until any offer is north of $1.50 to $2.00 range.... but just my gut feel.... so DYOR.

[Untamed]

Not in a million years. I would be seriously pissed if a takeover was approved. Not at any price they are likely to offer. Not at this point in time, anyway.