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This ASX tech share and Nearmap rival is surging 24% higher today

The Aerometrex Ltd (ASX: AMX) share price is storming higher on Friday.

In morning trade the aerial mapping company’s shares are up a massive 24% to $1.30.

Why is the Aerometrex share price storming higher?

This morning Aerometrex followed the lead of rival Nearmap Ltd (ASX: NEA) by releasing a coronavirus update of its own.

On Thursday the Nearmap share price zoomed higher after it revealed that demand for its services remained robust despite the outbreak.

As you might have guessed from its share price reaction this morning, demand for Aerometrex’s services remains strong to date.

According to the release, the positive trends described in the company’s first half result have continued in March. It notes that it has a strong pipeline of committed work for the second half of FY 2020, with very few deferred or cancelled projects.

Management also revealed that its MetroMap subscription service is continuing to attract new subscribers and adding revenues.

In fact, less than two weeks ago the company won five projects within the Queensland Government’s Spatial Imagery Subscription Program for aerial imagery services. This program is managed by the Queensland Government’s Department of Natural Resources, Mines and Energy, and has a total value of ~$1 million.

And in respect to business disruption from the outbreak, the company is optimistic it will be able to continue operating its fleet of aircraft. It has applied for an essential services exemption, with best practice procedures in place to ensure safety of aircrew and the public.

Balance sheet strength.

The company was also quick to point out that it has a strong balance sheet. At the end of the first half, Aerometrex had over $22 million in cash and an undrawn $6 million debt facility.

Looking ahead, any major expenditure or capital investment requirements of the business will be underpinned by contracted work or revenue increases.

The company’s managing director, Mark Deuter, commented: “Like many Australian businesses we are responding quickly to the dynamic situation presented by the spread of the COVID-19 virus. We have taken steps to ensure the well-being of all staff and comply with advice from State and Federal governments.”

“Aerometrex has been in operation for 40 years and historically we have seen a steady demand for our services throughout economic cycles. We are confident that we have made the best preparations to look after our people and to ensure the ongoing success of our business,” he concluded.

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As of 17/3/20

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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