Why the IkeGPS (ASX:IKE) share price is surging today

The IKE (ASX: IKE) share price is up 4.6% this morning. We take a look at the company's latest contract announcement.

The IkeGPS Group Ltd (ASX: IKE) share price is shooting higher today after a positive contract announcement.

At the time of writing, the IKE share price is up 4.6%, trading at 90 cents apiece.

IKE collects and analyses pole and overhead asset data for utilities and engineering firms. Below we take a look at the company's latest news.

child in superman outfit pointing skyward, indicating a rising share price

Image source: Getty Images

What did IKE report this morning?

The IKE share price is lifting after the company reported it had extended an agreement with a Fortune 100 United States electric utility. IKE is working with the company to assess and design its infrastructure.

The contract extension will boost IKE's transaction revenue in the 2022 financial year (the period ending 31 March 2022) by $1.2 million. On the newly extended agreement, the utility customer's contract value has increased more than 4-fold since the initial contract was signed in October 2020.

IKE reported the utility would make use of its platform to evaluate some 350,000 power pole assets. The contract goes into effect immediately.

What did management say?

IKE CEO Glenn Milnes welcomed the contract extension, saying:

The expansion of this existing customer contract demonstrates the value that the IKE platform provides to large electric utilities, and confirms our ability to expand the use of our platform over time across targeted tier-1 infrastructure operators…

We are also pleased with the broader strength of new contract wins over the quarter to 31 March, of approximately $5.4 million, and now with contract wins in the initial weeks of Q1 FY22, of approximately $2.2 million. This provides real momentum for growth for our FY22 to March 2022.

Atop the contract extension announced today, IKE added that it closed record contracts in Q4 (ending 31 March) for approximately $5.4 million. The company will record most of that revenue in the 2022 financial year.

IKE's full-year revenue for the 2021 financial year came in at roughly $9.3 million. That figure, still subject to audit, is in line with market expectations.

IKE share price snapshot

Over the past 12 months, IKE shares have outperformed, up 53% compared to the 34% gain on the All Ordinaries Index (ASX: XAO).

Year-to-date, the IKE share price has gone the other way and is down 17% so far in 2021.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ASX Share Market News

Man putting coins in a wooden piggy bank next to piles of coins.
Broker Notes

Are NAB shares cheap or expensive? Brokers can't agree

The experts have their say after this week's profit report.

Read more »

Happy investor on tablet with finance graphs rising in overlay.
Broker Notes

Could Goodman and Paladin Energy shares rise 20% to 80%?

Let's see why these shares are being tipped to charge higher from current levels.

Read more »

Close-up of a business man's hand stacking gold coins into piles on a desktop.
Broker Notes

Clime Capital pays an 8.7% dividend yield. Pitt Street Partners says it's undervalued

A combination of dividends and capital gains could make this share one to watch.

Read more »

A boy holds up a lamp shining dimly in the dark.
Opinions

I hunted the ASX for shares that could end 2026 on a high: These 3 stood out

Find out why these ASX shares caught my eye.

Read more »

A couple sits on a sofa, each clutching their heads in horror and disbelief, while looking at a laptop screen.
ASX Share Market News

5 things to watch on the ASX 200 on Friday

A selloff on Wall Street means Australia could be ending the week in the red.

Read more »

A man in a suit looks surprised as he looks through binoculars.
Broker Notes

These 3 ASX shares are on my watchlist for 2027

I've been on the hunt for value on the ASX.

Read more »

Smiling Indian manager leaning on chair.
ASX Share Market News

5 things to watch on the ASX 200 on Thursday

It looks set to be a very good session for investors. Here's what to expect.

Read more »

Piles of coins with rising arrows.
Broker Notes

I screened the ASX for five companies rated a strong buy by brokers

These companies could offer strong share price upside.

Read more »