Wellington Drive Technologies (Wellington), a leading provider of Internet of Things (IoT) solutions and energy efficient motors to the retail food and beverage industry, newly stated its unaudited trading results for the nine months ending September 2k19 and the 3rd-quarter 2k19 (Q3 2k19).
For the nine months finished 30 September 2k19, the company delivered 13.00 percent revenue growth, with revenue at $45.90M, a contrast to $40.70M for a similar duration previous year. Revenue from IoT products was 38 percent higher, revenue from the ECR2 motor platform was 41.00 percent higher and revenue for legacy motor products declined consistent with forecast.
Gross margin improved from 24.40 percent to 26.00 percent reflecting lower unit costs for Wellington’s ECR2 and SCS Connect products and the increasing IoT product share.
EBITDA for the nine months was $3.10M as compared to $1.10M for the similar duration previous year, a result which included a $0.40M non-cash accounting gain arising from a change in fair value of the contingent consideration payable for the acquisition of iProximity Pty Limited. EBITDA apart from this gain was $2.70M. Net profit for the nine months, counting the fair value adjustment, was $0.580M, up from a loss of $0.770M last year.
Revenue for Q3-2k19 was $12.60M which is consistent with Q3-2k18. Gross margin was 26.70 percent, a boost over the 23.80 percent recorded previous year for a similar duration. For the quarter Wellington achieved an EBITDA surplus of $0.70M, which included the $0.40M gain from the iProximity fair value change.
Other highlights in the quarter
- New IoT business opportunity in the Americas: The company is in the latter stages of negotiation for a new IoT business opportunity with a large manufacturer of commercial coolers in the Americas. Wellington’s confidence at this stage of negotiations stems from the fact there is an existing long-standing commercial relationship with these customers on another line of business. The Wellington board has approved the beginning of early development work on customer-specific applications.
- Data services growth: Services billings for the nine months finished 30 September 2k19 were US$1.40M, a boost on the $1.00M billed for a similar duration in 2k18.
- New Product Progress: The company shipped the 1st-ten proof of concept models of its SCS Network Cellular IoT Hub to selected beverage customers. This early-stage product is already receiving strong indications of interest.
- Debt repayment: In September, Wellington repaid $1.50M of debt to Onimeg Investments Limited and negotiated a six-month extension of the remaining $1.00M. Borrowings (apart from lease obligations) amounted to $3.20M in contrast to $4.80M at 30 June 2k19.
Cash: Cash on hand on 30 September 2k19 was $2.50M contrast to $1.80M in 30 June 2k19.
- Working capital: Trade receivables were $7.00M lower than 30 June 2k19 at $11.10M. Inventory was $0.80M higher at $5.20M as a result of the falloff in the legacy motor business. Trade payables were $4.00M lower at $12.60M. Operating cash flow for the quarter was strong at $3.30M.
- Contingent consideration because of the vendors of iProximity Pty Limited: In July 2k19, Wellington issued 1,417,344 shares to the vendors of iProximity Pty Limited following the sale and purchase agreement and reflecting the achievement of SCS Connect volume targets for 2k18.