Small-cap superstar Nearmap Ltd (ASX: NEA) has released a positive update to the market this morning, forecasting a 29% increase in local revenues and revealing a significant increase in its net cash position.
Nearmap's shares opened 2.4% higher, compared to a 0.9% decline for the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) and ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) indices.
So What: Nearmap is a provider of ultra-high resolution aerial imagery technology for business, enterprises and government customers, which is designed to save both time and costs for these customers.
In this morning's update, the company said that it expects full-year revenues for its Australian business to grow 29% over the prior period, from $17.8 million to $23 million, as its focus on marketing continues to result in a growing customer base.
Pleasingly for investors, Nearmap's growth prospects are by no means limited to Australia. It is already well advanced in its expansion into the much larger US market where it recently recorded its first commercial sales well ahead of schedule. The company has established operations in Fairfax, Salt Lake City and San Francisco while it now has 20 employees based in the country.
Nearmap said: "The company's investment in marketing is beginning to deliver returns and consideration is being given, well ahead of the Company's experience in Australia, to remove free access to its photo mapping and data services and replace this with limited time based trials and various fee based subscription models." It added that: "Commercial sales are accelerating" (emphasis added).
Given how early Nearmap is in its growth phase, it is vital that the company has access to cash to fund its expansion. Pleasingly, Nearmap's net cash balance as at the end of the 2015 year was $17 million but has since risen to $19 million thanks to a $1.8 million tax refund (due to its research and development activities).
Now What: As an addition, the company reaffirmed its Australian revenue run rate target of $30-50 million by December 2015 while it is also targeting a $30-50 million revenue run-rate for its US business by December 2017. Based on these targets, Nearmap could be an excellent pick-up for long-term investors at today's price tag.
