SLI Systems says rise in revenue shows good progress

TESS MCCLURE AND TOM PULLAR-STRECKER
Last updated 05:00 29/07/2014

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Christchurch-born e-commerce company SLI Systems has announced revenue just short of its projections.

SLI reported a 16 per cent rise in revenues to $22 million in the year to June, roughly in line with its prospectus forecast of $22.2m.

However, its annualised monthly revenue in June was $25m, a little further shy of its $26m prospectus forecast.

Hamilton Hindin Green sharebroker Grant Williamson said overall the result showed "good progress" and "investors will be relatively happy that the company is meeting its goals."

Williamson said the announcement had bounced SLI's share price off the lows of earlier this month.

SLI's share price was up 8 per cent, or 10 cents, but still "well short of the high we saw this year - the share price from that high has actually halved."

The company was floated on the NZX in May last year.

After climbing as high as $2.95, its shares sagged and are 13 per cent below their original $1.50 issue price.

Williamson said the SLI share price had "suffered in line with most other IT growth stock - they've all slipped back pretty seriously."

"There was a fair amount of investor hype in these IT stocks, and investors are now starting to take a closer look at the fundamentals of these businesses."

Chief executive Shaun Ryan said the company had "very little impact" on the share price, and as the company was relatively low-trading, it could fluctuate wildly.

Williamson also noted that SLI had a number of shares held in escrow.

"So there could be some supply of shares coming onto the market later this year that might put a bit of a dampener on any share price improvement in the short term.

Ryan said the company's as-yet undisclosed loss would be smaller than its $7.2m forecast because it was slightly behind schedule building up its sales and marketing team. Last year it posted a $2m loss.

The results are unaudited. Its audited results due are to be published on August 26.

SLI's "self-learning" cloud-based software is used by 510 online retailers to make it easier for customers to find products on their websites.

"Revenue has benefited from the good progress we have made recruiting large e-commerce sites, which take longer to engage but generate higher average monthly revenue and provide an outstanding opportunity to showcase SLI's capabilities to a greater number of this type of customer," Ryan said.

"We continue to look forward to the 2015 financial year with confidence in our ability to take advantage of the operating resources we have built during the year and the significant opportunities we see for the business."

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