ikeGPS – FY18 Interim Results

ikeGPS Group Limited

Appendix 1

Results for announcement to the market
Reporting Period 6 months to 30 September 2017
Previous Reporting Period 6 months to 30 September 2016

Amount NZ$ (000s) Percentage change
Revenue from ordinary activities 3,451 up 75.2%
Profit (loss) from ordinary activities after
tax attributable to security holder
(4,453) down 34.9%
Net profit (loss) attributable to security
holders
(4,453) Down 34.9%

Interim/Final Dividend Amount per security Imputed amount
per security
No dividends or distributions were made
during the period.
No dividend was declared.
N/A N/A

Record Date Not Applicable
Dividend Payment Date Not Applicable

Comments: The Appendix 1 should be read in
conjunction with the unaudited
consolidated financial statements for the
six months ended 30 September 2017.
The unaudited consolidated financial
statements for the six months ended 30
September 2017 have been prepared in
accordance with New Zealand Generally
Accepted Accounting Practice and comply
with NZ IAS34 Interim Financial
Reporting.
These financial statements and the CEO
report, provide the balance of
information required in accordance with
Listing Rule 10.3.2 Appendix 1.

Individual and total dividends
No dividends or distributions were made during the period.
Dividend or distribution reinvestment plans
There are currently no dividend or distribution reinvestment plans in
operation.
Net tangible assets per security

30 September 2017
(NZ cents)
30 September 2016
(NZ cents)
Net tangible assets per security
CENTS (NZD)
$0.09
CENTTS (NZD)
$0.17
Control of entities gained or lost during the period
Name of
entity
Date of the
gain or loss
of control of
the entity
Contribution to ikeGPS Group Limited’s
profit from ordinary activities during
the period and the previous
corresponding period
None. N/A N/A
Investment in subsidiaries, associates and joint operations
Subsidiaries, Associate or Joint Venture
Entity
ikeGPS Group
Limited’s percentage
holding in the entity
Subsidiaries
ikeGPS Limited 100%
ikeGPS, Inc. 100%
Associates

None.
N/A
Joint Ventures
None.
N/A

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Half Year for Six Months to
30 September 2017


ikeGPS Group Limited

Contents

Consolidated interim statement of profit or loss and other comprehensive income ........1
Consolidated interim statement of changes in equity .................................................................2
Consolidated interim balance sheet .............................................................................................3
Consolidated interim statement of cash flows ..............................................................................4
Notes to the consolidated interim financial statements ....................................................... 5 - 9

1

Consolidated interim statement of profit or loss and other
comprehensive income





















The accompanying notes form part of, and should be read in conjunction with, these financial statements.






Unaudited
6 months to
September
2017
Unaudited
6 months to
September
2016
Continuing operations$'000's$'000's
Operating revenue3,451 1,970
Cost of sales(1,936)(902)
Gross profit1,515 1,068
Other income72 114
Operations cost5(239)(466)
Sales and marketing expenses5(1,545)(1,762)
Research and engineering expenses5(1,663)(2,382)
Corporate costs5(1,934)(2,528)
Foreign exchange (losses)/gains(625)(888)
Expenses(6,006)(8,026)
Operating loss(4,419)(6,844)
Net finance income(12)15
Net loss before income tax(4,431)(6,829)
Income tax credit (expense)/credit(22)(7)
Loss attributable to owners of ikeGPS Group(4,453)(6,836)
Other comprehensive loss
Items that may subsequently be recognised through profit or loss
Exchange differences on translation of foreign operations562 830
Comprehensive loss(3,891)(6,006)
Basic loss per share $ (0.06) $ (0.13)
Diluted loss per share $ (0.06) $ (0.13)

2

Consolidated interim statement of changes in equity























The accompanying notes form part of, and should be read in conjunction with, these financial statements.




Share
capital
Accumulated
losses
Share based
payment
reserve
Foreign
currency
translation
reserve Total
$'000's$'000's$'000's$'000's$'000's
Opening balance at 1 April 201637,352 (24,036)275 (350)13,241
Loss for the year - (6,836) - - (6,836)
Currency translation differences - - - 830 830
Total comprehensive income/(loss) - (6,836) - 830 (6,006)
Issue of ordinary shares7,893 ---7,893
Recognition of vesting of share-based options - -93 - 93
Total transactions with owners7,893 - 93 - 7,986
Balance at 30 September 201645,245 (30,872)368 480 15,221

Share
capital
Accumulated
losses
Share based
payment
reserve
Foreign
currency
translation
reserve Total
$'000's $'000's $'000's$'000's$'000's
Opening balance at 1 April 201745,252 (34,763)399 (252)10,636
Loss for the year - (4,453) - - (4,453)
Currency translation differences - - - 562 562
Total comprehensive income/(loss) - (4,453) - 562 (3,891)
Issue of ordinary shares4,012 ---4,012
Recognition of vesting of share-based options - - 49 - 49
Share based payment reserve movement - - (2) - (2)
Total transactions with owners4,012 - 47 - 4,059
Balance at 30 September 201749,264 (39,216)446 310 10,804

3

Consolidated interim balance sheet




















Director Date: 28 November 2017 Director Date: 28 November 2017
NZ (New Zealand Time) NZ (New Zealand Time)




The accompanying notes form part of, and should be read in conjunction with, these financial statements.
Unaudited
September
2017
Audited
March
2017
ASSETS$'000's$'000's
Current assets
Cash and cash equivalents3,414 2,730
Trade and other receivables2,288 986
Prepayments444 598
Inventory1,379 2,513
Total current assets7,525 6,827
Non-current assets
Property, plant and equipment1,121 1,370
Intangible assets3,780 4,048
Deferred tax asset18 19
Total non-current assets4,919 5,437
Total assets12,444 12,264
LIABILITIES
Current liabilities
Trade and other payables878 1,250
Employee entitlements210 228
Deferred revenue 552 150
Total current liabilities1,640 1,628
Total liabilities1,640 1,628
Total net assets10,804 10,636
EQUITY
Share capital649,264 45,252
Share based payment reserve446 399
Accumulated losses(39,216)(34,763)
Foreign currency translation reserve310 (252)
Total equity10,804 10,636

4

Consolidated interim statement of cash flows




























The accompanying notes form part of, and should be read in conjunction with, these financial statements.





Unaudited
6 months to
September
2017
Unaudited
6 months to
September
2016
$'000's$'000's
Cash flows from operating activities
Cash receipts from customers2,500 2,919
Cash paid to suppliers and employees(5,024)(7,902)
Interest and tax paid(38)(5)
Net cash used in operating activities7(2,562)(4,988)
Cash flows from investing activities
Purchases of property, plant and equipment(9)(110)
Additions to intangible assets(697)(463)
Interest received5 20
Net cash used in investing activities(701)(553)
Cash flows from financing activities
Proceeds from issuance of shares on listing64,012 7,795
Net cash from financing activities4,012 7,795
Net (decrease) in cash and cash equivalents749 2,254
Cash and cash equivalents at beginning of year2,730 5,292
Effect of exchange rate fluctuations on cash held(65)(62)
Cash and cash equivalents3,414 7,484

5

Notes to the consolidated interim financial statements

1. Reporting Entity
Ike GPS Limited (the “Company”) is a limited liability company domiciled and incorporated in New Zealand,
registered under the Companies Act 1993 and listed on the New Zealand Stock Exchange (“NZX”) and
Australian Stock Exchange (“ASX”). The Company is an FMC reporting entity for the purposes of the
Financial Markets Conduct Act 2013. The financial statements for the period ended 30 September 2017
comprise the Company and its subsidiaries (together referred to as the “Group”) which include ikeGPS
Limited and ikeGPS Inc.
The principal activity of the Group is that of design, marketing and sale of integrated GPS data capture
devices and related software.

The financial statements were authorised for issue by the Directors on 28 November 2017.

2. Basis of preparation
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below. These policies have been consistently applied to all the periods presented, unless otherwise
stated.
Statement of compliance
The condensed consolidated interim financial statements have been prepared in accordance with New
Zealand Generally Accepted Accounting Practice ("NZ GAAP"). They comply with NZ IAS 34 Interim
Financial Reporting and IAS 34 Interim Financial Reporting.
Basis of measurement
The financial statements have been prepared on the historical cost basis with the exception of certain
financial instruments which are measured in accordance with the specific relevant accounting policy.

Critical estimates and judgments
The preparation of financial statements requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised and in any future periods affected.
In preparing these condensed interim financial statements, the significant judgements made by
management in applying the Group’s accounting policies and the key sources of estimation uncertainty were
the same as those that applied to the consolidated financial statements for the year ended 31 March 2017.
Going concern

These financial statements have been prepared based on the Group being a going concern, which assumes
the Group has the ability and intention to continue operations for a period of at least 12 months from the
date of the financial statements. The following condition indicates the existence of a material uncertainty
that may cast significant doubt on the validity of this assumption.
The Group had net operating cash outflows for the six months ended 30 September 2017 of $2,562,000
(twelve months ended 31 March 2017: $9,021,000), and a cash balance of $3,414,000. If this level of cash
usage continued the Group would not be able to fund its operations without the need to raise additional
capital.

6

Notes to the consolidated interim financial statements

2. Basis of preparation (continued)
The approved base business plan for FY18 includes the prudent management of costs while focusing effort
on realising the significant sales opportunities for the entity’s products.
The plan takes into consideration:
- an expectation of increased sales of its IKE4 and Spike products
- increased subscription revenue associated with IKE4 and Spike
- a material reduction in the level of development related costs,
- the ability of the Group to manage its growth activities and associated costs.

To support operating cashflow, the group recently completed a share placement and share purchase
program raising $4,012,000.
Although the Company is not currently engaged in pursuing raising additional capital, the dual listing on the
NZX and ASX provides the Company with the potential option to pursue capital raise opportunities from a
wider market in order to among other things; expand existing business, additional working capital, and
acquire or establish new businesses. The Directors believe that additional capital could be raised should
circumstances necessitate.
On this basis, the Directors believe that the Group has sufficient funding to continue operations for at least
the next 12 months from the date of authorising the financial statements, and hence consider the use of the
going concern basis appropriate.
The Group’s ability to improve its financial capacity and cash flow generated from its operations cannot be
assured.
These consolidated financial statements do not reflect adjustments in the carrying values of the assets and
liabilities, the reported revenues and expenses, and the balance sheet classifications used, that would be
necessary if the Group were unable to realise its assets and settle its liabilities in the normal course of
operations. Such adjustments could be material.

3. Significant accounting policies
The interim financial statements have been prepared using the same accounting policies and methods
of computation as set out in the 31 March 2017 annual financial statements. All accounting policies have
been applied consistently to all periods presented in these interim financial statements.

4. Operating segments.
The segment reporting format reflects the Group’s management and internal reporting structure.
“Contribution” represents gross profit after allocating cost of goods sold and selling expenses. Reporting of
overheads and balance sheet position is not undertaken at a level lower than the Group as a whole.
Geographically, revenue is substantially generated in the United States.

7

Notes to the consolidated interim financial statements

4. Operating segments (continued)



5. Operating expenses
Operating expenses






1. Relates to employee benefit expense and external contractors and consultants expenses that are
directly attributable to the development of intangible assets and have been capitalised.
2. Direct selling and marketing includes expenses incurred mainly in relation to promotional
activities such as commissions, travel and other direct marketing expenses.
3. Major other operating expenses are facilities, IT costs, advisory and engineering overheads.






Utility
New
BusinessGroupUtility
New
BusinessGroup
$'000's$'000's$'000's$'000's$'000's$'000's
Operating revenue 2,202 1,249 3,451 861 1,110 1,971
Contribution268(139)129(466)(29)(495)
Net attributable (other corporate income and expenses)(4,560)(6,334)
Net loss before tax(4,431)(6,829)
Unaudited 6 months to
September 2017
Unaudited 6 months to
September 2016
Unaudited
6 months to
September
2017
Unaudited
6 months to
September
2016
$'000's$'000's
Amortisation of development asset
952 731
Amortisation of patents and software
15 15
Depreciation114 223
Total amortisation and depreciation 1,081 969
Employee benefit expense
3,367 4,330
Employee benefit expense capitalised
1.
(698)(463)
Operating lease expenses
208 217
Direct selling and marketing
2.
439 512
Other operating expenses
3.
984 1,573
Total operating expenses
5,381 7,138

8

Notes to the consolidated interim financial statements

6. Contributed equity
Share Capital

Share Capital on issue

7. Cash used in operations

Unaudited
6 months to
September
2017
Unaudited
6 months to
September
2016
$'000's$'000's
On Issue 01 April45,25237,352
Issued under ESOP-98
Issued under share placement3,7255,245
Issued under share purchase plan3873,000
Less listing costs offset against issue proceeds(100)(450)
Total share capital 49,26445,245
Unaudited
6 months to
September
2017
Unaudited
6 months to
September
2016
Fully paid total shares at 01 April 64,270,910 50,378,506
Ordinary shares issued on settlement of options- 150,000
New shares offered 14,179,345 13,742,404
Fully paid ordinary shares 78,450,255 64,270,910
Unaudited
6 months to
September
2017
Unaudited
6 months to
September
2016
$'000's$'000's
Loss for the year(4,453)(6,836)
Less Investment interest received(5)(18)

Non-cash items included in net loss
Depreciation 215 223
Amortisation of intangible assets967 746
Deferred tax expense(1)7
Share option expense49 193
Write off of obsolete materials and assets 288 -
Foreign exchange (gains)/losses625 888
2,138 2,039
Add/(less) movement in working capital items
Decrease/(Increase) trade and other receivables(1,348)804
Decrease/(Increase) in inventories935 (139)
Decrease/(Increase) in prepayments154 (667)
Increase/(Decrease) in trade and other payables(372)(250)
Increase/(Decrease) in deferred revenue402 30
Increase/(Decrease) in employee entitlements(18)31
(247)(191)
Net cash used in operating activities(2,562)(4,988)

9

Notes to the consolidated interim financial statements

8. Related parties
The Group issued 14,179,345 new ordinary shares under share placement and share purchase plan.
Total of 2,628,450 (18.5% of total shares issued) were acquired by Related Parties (being Directors or
Officers of the Group).
9. Subsequent events
There are no subsequent events.

ikeGPS Group Limited

Level One, 42 Adelaide Road
Mount Cook
Wellington 6021
Telephone: +64 4 382 8064

Directors of ikeGPS Group Limited

Richard Gordon Maxwell Christie
Bruce Harker
Alex Knowles
Glenn Milnes
Frederick Lax

Legal Advisers

Chapman Tripp
10 Customhouse Quay
PO Box 993
Wellington 6140
Telephone: +64 4 499 5999

Auditor

PricewaterhouseCoopers
113 – 119 The Terrace
PO Box 243
Wellington 6140
Telephone: +64 4 462 7000

Share Registrar

Link Market Services Limited
PO Box 91976, Auckland 1142
Level 7 Zurich House
21 Queen Street, Auckland 1010
Telephone: +64 9 375 5998

Bankers
Bank of New Zealand
Harbour Quays, Ground Floor,
60, Waterloo Quay, Wellington 6011
Private Bag 39806,
Wellington Mail Centre,
Lower Hutt 5045

www.ikegps.com

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Find Out More At:
www.ikegps.com
350 Interlocken Blvd, Suite 250, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com


For Immediate Release 29 November 2017
Record sales into the electric utility & communications market
IKE 1H FY18 Results
ikeGPS (IKE) advises the following as relates to 1H FY18 results ending September 2017 (all figures NZD):
- Revenue in the period of $3.5m (75% higher than prior calendar period (PCP) of $2.0m)
- Net loss in the period of $3.9m (35% improvement against PCP loss of $6.0m)
- Operating cash used in the period of $2.6m (48% improvement against PCP of $5.0m)
- Record unit volume sales of the IKE product, the largest contributor to overall IKE revenue and gross margin, into
the electric utility and communications market:
o 186 IKE systems shipped 1H FY18 (94% higher than PCP of 96 systems).
▪ Record 116 IKE systems shipped in Q2.
▪ Q3 expected to be stronger again based on orders on-hand.
▪ Total orders received YTD are approximately 305 systems.
o Subscription framework is in place for IKE4, meaning lower recognised revenue at the time of sale but
approximately 50% greater revenue overall as against the predecessor IKE3 product.
o Original full year FY18 guidance was for 300 systems and greater than 40% YoY growth. This has been
upgraded by approximately $1m to greater than 360 systems and greater than 70% YoY growth.
- Spike sales, primarily into the Signage market, were steady in Q2 FY18 against Q1 FY18 with 1,251 total units
shipped 1H FY18. Full year guidance is for 3,000 units and greater than 50% YoY growth.
- 7,500 Stanley Smart Measure Pro units shipped 1H FY18 into the European and Australian markets, with
approximately 1,000 additional units expected to ship November 2017.
- New ‘IKE Analyze’ product launched and delivered.
o Revenue run rate for IKE Analyze has grown to approximately $1m p. a.
- Cash breakeven target expected to be met in FY18 based on orders received YTD.
Further Detail
IKE4: Material progress with target accounts. Delivery of new IKE Analyze product.
In addition to run rate sales growth in the U.S. market from the inside sales function, several target accounts were
developed positively in the period. Recently, IKE has announced major target account wins that will primarily impact
2H FY18 revenue and cash, including:
- A first phase order of 112 systems into one of the largest global communications and fiber companies.
o Recognised revenue from this initial deployment will be approximately $1.3m in FY18 with ongoing
recurring revenue of approximately $400k per annum, plus any associated services revenue.
- A approximately $0.6m sale into an investor-owned utility in California. The IKE4 platform is now in all investor-
owned utilities in the State’s California and Washington. The west coast of the U.S. was the initial target for IKE’s
sales team and this is the second group to scale a deployment to greater than $0.5m.
- A third phase order of 15 IKE4 systems, for approximately $180k, from an engineering services company.
o This customer has grown to have more than 50 IKE systems deployed, having added 30 IKE4 systems
YTD in FY18.
o Associated subscription revenue from this customer at this volume of systems is expected to be
approximately $0.45m over the next 36 months.
This progress, together with pilot programs with other target accounts, provides confidence in the potential for further
larger scale deployments.

Find Out More At:
www.ikegps.com
350 Interlocken Blvd, Suite 250, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com



Additionally, the new ‘IKE Analyze’ product was introduced with an initial project sold in the period. Enabled by the IKE4
Cloud, IKE now delivers analysis and reporting services on the pole data captured in the field by an IKE4 customer.
Specifically, the IKE Analyze offering delivers Pole Loading Analysis and Make Ready Engineering reports, billed on a
per-pole basis. For a IKE4 customer, this product provides valuable access to IKE’s pole analysis expertise and
efficiency, and reduces or eliminates the cost of back-office staff to take IKE4 field data from field-to-finish. For IKE, IKE
Analyze extends the depth of the solution offered to customers and provides for the potential to generate two to three
times the level of revenue on any specific sale as against an IKE4 product-only deal.

Spike: New resellers added, software integration with key industry partners progressed, core patents awarded.
Sales run rate into the Signage market, Spike’s current core market, was steady through the period with 1,251 units
shipped against guidance for 3,000 units for the full year or greater than 50% YoY growth. Additionally:
- 15 new AEC and Geospatial market resellers were added in the period, providing sales coverage in 18 U.S. States
and seven new countries including Australia, South Korea, and Sweden.
o A new reseller typically buys 10-20 units when signing on and a successful partner would expect to
sell 100-200+ units in the initial 12-18 months.
o These resellers have been recruited in advance of the full launch of AEC-specific and Geospatial-
specific integrations for Spike in 2H FY18. As such these groups have not yet begun to sell in any
volume.
o The AEC and Geospatial markets are expected to ultimately present the opportunity to sell larger
volume deals to enterprise customers.
- The focus continued around Spike’s SDK development, enabling full integration with incumbent software players.
These include with:
o Autodesk - the most widely used CAD software in the global AEC market. This integration has been
completed and released to market.
o Esri - the most widely deployed software in the geospatial market, used by more than 350,000
organisations including the world’s largest cities and many national governments. This planned
product integration is targeted for release Q4 FY18.
o Spex – in the period an underlying insurance customer grew to have approximately 120 Spikes
deployed in Texas and Florida for catastrophe loss assessment and damage inspection.
- Spike was sold into pilots or trials to 14 new Department of Transportation customers. Each of these groups
ultimately has capacity to deploy hundreds or thousands of units for asset inspection applications.
- Two core Spike patents were awarded covering the European and Chinese markets.

Stanley Smart Measure Pro: 7,500 units shipped to plan.
European markets remained the focus for sales programmes via Stanley Black & Decker, Inc. for the Stanley Smart
Measure Pro product. Approximately 7,500 units shipped to plan in 1H FY18 and another 1,000 units are expected to
ship in November. A pilot online sales programme continued with Home Depot in the U.S. via homedepot.com,
however there is not yet any indication that the product’s presence on their online store will translate to a broader roll
out to their approximately 2,200 physical stores. IKE will advise the market if new orders are received for 2H FY18.

Gross margin: Increased. Impacted by several non-cash items.
Gross Margin for the period was $1.5m (36% higher than PCP of $1.1m). This was impacted by several non-cash, one-
time items; the write-down of obsolete IKE3 parts (the predecessor product to IKE4) of $179k and consumption of
higher priced Spike & Stanley Smart Measure Pro parts that were sourced to protect the supply chain of $181k.
Additionally, IKE experienced lower Average Selling Prices on the hardware component in IKE4 enterprise sales due to
volume discounting. Associated IKE4 software subscription revenue has been recorded as deferred revenue and will be
recognised over the ensuing 12 months.

Find Out More At:
www.ikegps.com
350 Interlocken Blvd, Suite 250, Broomfield CO 80021, USA
Office: +1 303 222 3218
www.ikegps.com

Working capital: In place to allow delivery to new large IKE4 enterprise customers.
As advised to the market a Placement and Share Purchase Plan was closed in the period that raised approximately
$4.0m, with directors and management subscribing for approximately $0.75m of new shares within this process. This
will fund a working capital requirement expected to grow over the coming 12-18 months as IKE4 is delivered into
several large enterprise customers.

Cost reductions and transition to cash breakeven: Guidance maintained.
Operating cash used in the period was $2.6m (48% less than PCP of $5.0m). This significant improvement reflects
continued prudent control of expenses. Lower operating expenditure levels are expected for the remainder of FY18
relative to FY17, consistent with the well progressed shift from investment into platform engineering to the focus on
sales & marketing. These benefits are partially offset by a longer cash collections cycle resulting from terms of trade
with new large enterprise customers.

With higher sales of IKE-branded products, including the target account wins detailed above, the forecast transition to
cash breakeven in FY18 is maintained.

Board: New director appointment process underway.
May 2017 saw the retirement of Peter Britnell as IKE’s longest serving director. Peter made a significant contribution to
the establishment and development of the IKE Group and IKE wishes to record its thanks for his service. A new director
appointment process is underway.



ENDS
Contact: Glenn Milnes, CEO, +1 720-418-1936, glenn.milnes@ikegps.com