Tech play Connected IO took in cash receipts and invoiced products this quarter to the value of $660,000 with another $650,000 in purchase orders on the books yet to be invoiced. Bottom line performance is also expected to improve with reduced U.S. overheads and renegotiated manufacturing costs expected to boost gross margins from 30% to 50% on some products.
ASX-listed Connected IO’s push into the ‘internet of things’ sector continues to bear fruit with the Perth-based junior tech firm experiencing solid cash receipts, product sales and customer orders so far this quarter.
In a market update this week, the company said cash receipts and invoiced product this quarter have so far reached over $660,000 with another $650,000 in purchase orders on the books yet to be invoiced.
Last month, the company shipped its first batch of modem-like devices to its Australian and New Zealand distributor, M2M connectivity, as part of its plan to roll out its wireless products globally in the rapidly expanding internet of things sector.
Connected IO has amassed a high profile list of blue chip clients for its modem-like devices that provide users with the ability to control or monitor a variety of different things remotely over the internet in a wide array of commercial operations.
Connected IO management have also been slashing and burning its cost base with U.S. overheads dropping dramatically by 40%.
Heavily renegotiated manufacturing costs have also been slashed as economies of scale start to kick in with volume sales.
The company is expecting to increase gross margins from 30% to approximately 50% on some products as a result.
Current inventories are sitting at about $800,000 with the company confident that it can convert a significant amount of this into cash receipts during the June and September quarters.
Connected IO CEO Yakov Temov said “CIO has built a solid recurring customer base in the North American market. Over 80% of our business is generated from existing customers. CIO can now accurately report on the sectors generating business volume and can leverage these statistics to focus on revenue generating opportunities.”
In the recent market update, the company said that 40% of cash receipts so far this year arose from the retail and enterprise sectors whilst 20% were driven by the digital signage sector.
The surveillance/automotive sector contributed to 15% of sales, as did the security/automation sector.
Connected IO’s strength appears to be the suitability of its modem like products for a diverse range of industries.
With the “internet of things” concept starting to bite and more and more “things” being connected to the internet every year, the company appears to be in the right space at the right time.
If its cash receipts and order book are any indicator, the Perth listed company clearly has the tiger by the tail now.