The Nearmap Ltd (ASX: NEA) share price is on watch as the aerial imaging business provides a FY22 update to investors.
Nearmap says it provides access to high resolution aerial imagery, city-scale 3D datasets, and integrated geospatial tools. That allows organisations to do ‘virtual site visits’ from the office without actually having to visit the location.
FY22 update
At the company’s annual general meeting (AGM) it provided FY22 guidance for its annual contract value (ACV). It said FY22 ACV is expected to end the financial year at between $150 million to $160 million on a constant currency basis.
Nearmap said that it has continued to use the funds collected from a capital raising, in line with FY22 guidance, to increase investment into the business. It has used approximately $30 million of this net cash.
Those funds are being allocated towards previously identified growth initiatives as it scales the business for growth.
After a number of successful tests of custom designed components in aerial flight, Nearmap said it remains on track to manufacture and commence the roll-out of its next version of its camera systems, HyperCamera3, in FY22.
Longer-term growth plans
Nearmap still thinks that it can grow at a fast rate. The company said that it will continue to target ACV growth of between 20% to 40% in the medium-to-long-term and to maintain underlying retention above 90%. In FY21 it saw its ACV portfolio grow to $128.2 million with a 12 month retention of 93.1%.
The company said that the combination of a healthy balance sheet and strong FY21 ACV growth means it remains fully funded for the foreseeable future.
North America continues to see faster growth than the ANZ market did at the same point after seven and eight years of growth. Insurance and government clients are key growth drivers here. It wants to be the market leader in North America.
Nearmap is offering new products to expand to the analytics market. It’s also thinking about geographic expansion.
This company is an interesting option for growth investors. It has done well for long-term shareholders, but I’m not sure how profitable it can be, how competitive the future will be and what a fair price for the Nearmap share price is today. Nearmap continues to grow well. Though for now, I’m looking at other ASX growth shares.
