Nearmap (ASX:NEA) increases revenue by 25pc over FY20

• Nearmap (NEA) has ended FY20 with $96.7 million in revenue — a 25 per cent increase compared to FY19
• Despite the strong revenue, the company still posted a net loss of over $36 million for the same period
• Its earnings before interest, taxes, depreciation and amortisation (EBITDA) for the year was even worse, down 41 per cent to $9.1 million when compared to the 2019 financial year
• Nearmap ended FY20 with $36 million in cash, compared to nearly $76 million in FY19
• As a result of the net loss, no dividends have or will be paid to shareholders for the end of FY20
• Looking ahead, Nearmap’s CEO and CFO said they would focus on their customers and expanding growth
• The company’s shares are down nine per cent following today’s report, trading for $2.44 per share

Aerial photography business Nearmap (NEA) increased revenue by 25 per cent in FY20, but it wasn’t enough to stop the company from posting a $36.7 million net loss.

Finances and sales

Nearmap made a total of $96.7 million in revenue in the 12 months to June 30, up from $77.6 million in FY19.

But net profit after tax (NPAT) decreased by 146 per cent, leaving the company with over double the loss compared to its $14.9 million slump into the red in FY19.

Nearmap said the blowout in net loss was influenced by poor earnings, with the company’s total earnings before interest, taxes, depreciation and amortisation (EBITDA) down 41 per cent in FY20, dropping from $15.5 million to $9.1 million.

As a result of the net loss, no dividends have or will be paid to shareholders for the end of FY20.

However, the company ended the 2020 financial year with $36.1 million in the bank. Nearmap had around $75.9 million cash in the bank in FY19, however, that was due to a $70 million placement it undertook in September 2018.

In addition, the company managed to grow its annual contract value by 18 per cent over FY20.

COVID-19 and outlook

COVID-19 had a clear effect on Nearmap in FY20. To combat the financial effects, NEA implemented a range of cost-cutting measures in March.

As a result of these measures, there was a 30 per cent reduction in its overall
cost base — including a 10 per cent reduction to permanent employment costs and a 20 per cent reduction in wages.

Speaking on today’s results, the company’s CFO, Andy Watt, said the overall net loss for FY20 shows the company was investing in itself.

“FY20 has seen Nearmap invest significantly in its operational foundations to create a highly scalable business that will support its future growth aspirations,” he said.

Looking ahead, Nearmap CEO and Managing Director, Rob Newman, said the focus was on expanding growth.

“In FY21 we will continue to focus on our customers and elevating their experience with Nearmap,” he said.

“We will increase the alignment of our Product, Sales & Marketing teams to our core growth verticals especially where there is a strong focus in our expanded higher-value product suite,” Rob added.

Following today’s FY20 financial report, shares in the company have dropped as shareholders react to the blowout in losses.

Nearmap’s shares are currently trading down nine per cent for $2.44 at 11.38 am AEST.