INDEPENDENT NEWS

SLI Systems shares soar 80% after maiden profit

Published: Fri 23 Feb 2018 02:07 PM
SLI Systems shares soar 80% after maiden profit
By Tina Morrison
Feb. 23 (BusinessDesk) - SLI Systems stock soared 80 percent to its highest level in more than six months after the e-commerce software seller posted a maiden first-half profit as it changes strategy to a more self-service model, retained more customers, and reduced costs.
The Christchurch-based company posted a profit of $1.2 million, or 1.8 cents per share, in the six months ended Dec. 31, from a loss of $1.4 million, or 2.1 cents, in the year-earlier period. Operating expenses fell 8.4 percent to $6.2 million while operating revenue increased 6.9 percent to $16.5 million.
The company's shares jumped 20 cents to 36 cents shortly after the NZX opened for trading at 10am. Still, that lags behind the $1.50 sale price in its May 2013 initial public offer.
SLI is recovering from a $1.9 million loss last financial year as it reorients its product offering to allow customers to self-service and build their own capabilities more easily, amid a battle for market share among retailers whom it says are increasingly resisting the costs and logistics of deploying numerous technologies at once. Today it reported its first profit since listing in 2013, and a positive cash inflow of $793,000, lifting cash reserves to $6.4 million.
"We are navigating our transition to a new self-service product strategy, which is seeing the unbundling of our cloud-based software-as-a-service (SaaS) solutions from the professional services we provide our customers," chair Greg Cross said in a statement.
"Over the last six months we have invested to ensure our customers continue to extract the maximum value from our existing products. Meanwhile, we have decreased spending in marketing and sales to a level that is sustainable to align with the success we believe we can achieve. We have reallocated resources to the development of new products that we believe will accelerate and drive growth for the long term."
Cross said the global market for SLI's products "had never been stronger".
"E-commerce continues to grow, driving the adoption of digital marketing and online and mobile search," he said. "Meanwhile, the global economy, for the most part, remains strong and this is particularly the case in the strategically important US market, which is benefiting from recent tax reforms. These conditions, coupled with the implementation of our new strategy, give us confidence that SLI can return to sustainable growth and achieve the strong potential we see for our technology globally."
Chief executive Chris Brennan said SLI had made good progress over the past six months transforming the company's proprietary closed systems into open systems that will let customers choose how they implement and manage SLI’s solutions.
"We believe it will deliver an acceleration in customer acquisition and improve customer retention," Brennan said.
SLI said it has no plans to pay dividends for the foreseeable future.
(BusinessDesk)
ends
BusinessDesk
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk
Email:

Next in Business, Science, and Tech

Government accounts show strong economy
By: New Zealand Government
OceanaGold cleared to buy land for Waihi tailings expansion
By: BusinessDesk
Fletcher sued for $7.5m over Christchurch justice precinct
By: BusinessDesk
PHARMAC signs bundle deal for more cancer medicines
By: PHARMAC
Government levels electricity playing field for consumers
By: New Zealand Government
NZ dollar rises on better-than-expected govt surplus
By: BusinessDesk
Rail revaluation bolsters Crown 2019 accounts
By: BusinessDesk
Shane Jones' PGF quietly made tax-exempt
By: BusinessDesk
Robertson’s pockets bulge as everyday Kiwis struggle
By: New Zealand National Party
DHB deficits out of control, health services at risk
By: New Zealand National Party
Green Party responds to Government surplus announcement
By: Green Party
Nearly $2 of every $5 swallowed by the Government
By: ACT New Zealand
NZEI Te Riu Roa welcomes Government's education spending sig
By: NZEI
Give the money back, Grant
By: New Zealand Taxpayers' Union
Surplus should be spent on housing, health and services
By: Public Service Association
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media