Nearmap shares have gained more than 16 per cent after the digital imagery company reaffirmed its guidance for this financial year.
Chairman Peter James told the company’s annual general meeting in Sydney on Thursday that he expected the group’s annualised contract value to be in line with consensus forecasts of between $116 million to $120 million.
That represents a potential 33 per cent increase on the $90.2 million value of Nearmap’s contract portfolio as at August’s full-year result, which itself had expanded by 36 per cent over the FY19 year.
“Nearmap has had an excellent year,” Mr James said.
“We have a proven and unique business model, an outstanding team, world class technology and a balance sheet to support the execution of our strategy.”
At 1244 AEDT, Nearmap shares were up 15.7 per cent to a three-week high of $2.88, up 91 per cent on the year, but down 32.8 per cent from its June peak of $4.29.
The company’s shares took a hit in August’s when the full-year result showed higher marketing and operational costs, and a near doubling of depreciation and amortisation, had widened its net loss by 35 per cent to $14.9 million.
However, the company expects 12 per cent compound growth in subscriptions in the coming year, and that it will build on its foray into New Zealand and Canadian markets.
Its North American business is more than a third of the company’s total portfolio, Mr James said.
Royal Bank of Canada Capital Markets analyst Garry Sherriff, who has an outperform rating on the stock, said RBC wasn’t concerned with competitor Aerometrex entering the Australian market with its LiDar survey technology.
“We believe the Australian market is big enough to have 2-3 large players and that NEA will firmly remain number one in the Australian market in the medium-long term,” he wrote.