EROAD's half year results suggest the fleet vehicle hardware/software provider may not be happily trucking along.

The good news was record revenue of NZ$85.4m and a positive EBIT of NZ$1.0m, albeit both propped off by a one-off non-cash accounting adjustment of NZ$7.0m relating to the Coretex acquisition. Props once again to EROAD's detailed disclosures, which are generally very transparent.

However, the dreaded initiation of a "strategic review" was just one of a series of announcements that suggests EROAD may have missed the left turn at Albaquerque.

While the business has a large number of trials under way, these can take years to convert to sales and organic growth is stuck in the slow lane. Revenue per unit has at least stopped the decline seen in the past few halves but is also not growing and, therefore, isn't helping to offset surging inflation.

It wasn't given top billing but management snuck in an admission that the targeted NZ$250m of revenue by FY25 wasn't going to be achievable.

The balance sheet looks increasingly vulnerable to another capital raise and when asked when cash flow sustainability might be achieved management described it being as beyond FY24, which brings to mind a certain Talking Heads song.

Ironically I was moving yesterday and so wasn't able to dial into the AGM (but read the transcript). I would be interested to hear from anyone who did.

[on watchlist]