The Nearmap Ltd (ASX: NEA) share price is rocketing higher on Tuesday morning.
At the time of writing the aerial imagery technology and location data company's shares are up 16% to $1.39
Why is the Nearmap share price rocketing higher?
This morning Nearmap followed up on its update from four weeks ago with another one outlining current trading conditions.
According to the release, trading conditions have not been materially impacted by the coronavirus pandemic. As a result, its short term sales performance has been largely unaffected.
Despite this, the company has been prudently deploying cost management initiatives across the business to preserve cash, maintain a strong balance sheet, and maximise flexibility for the future without the need to raise additional capital.
Nearmap is aiming to make a 30% saving in operating and capital costs. This is with the intention of making the business cash flow breakeven by the end of FY 2020. Some of these savings will come by reducing executive pay and cutting its overall headcount.
However, this will not come at the cost of product development. Management expects there to be no discernible impact on its ongoing commercialisation strategies for 3D, AI, or roof geometry content. Its investment in a next generation camera system will also continue.
The company's CEO, Dr Rob Newman, explained: "For the Nearmap business, the unprecedented circumstances have meant we have had to make some difficult decisions to provide a clear path for our team, customers, suppliers and shareholders."
"These decisions will see us well-positioned to navigate the road ahead and will allow us to continue to fully invest in our growth initiatives including the commercialisation of AI and roof geometry content and investment in the development of a next generation camera system."
FY 2020 guidance.
Nearmap commented on its guidance for FY 2020, stating that it "continues to monitor trading conditions closely and should conditions materially change, will update the market accordingly."
This appears to indicate that it is on track to achieve annualised contract value in the range of $102 million to $110 million in FY 2020.
