IPO Watch: Aerial mapping, imaging firm Aerometrex plotting itself on the ASX next week
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Nearly 40 years after its establishment, Adelaide-based Aerometrex will list on the ASX on Tuesday December 10.
The aerial imaging firm raised $25m and will enter the bourse with a market capitalisation of $95m.
Mention the words ‘aerial imaging’ and you may immediately think of aerial surveys small cap explorers use. While this is indeed a use it is far from the only one. It can also be used to predict bushfires, coastal erosion and develop infrastructure.
Aerometrex’s products have been used by miners, construction firms, state governments and even tech companies such as Microsoft.
“People can see what’s up there without having to travel around. But it also underpins a whole raft of industries including engineering projects [and] environmental monitoring,” managing director Mark Deuter told Stockhead.
His company is responsible for the UltraCam Osprey aerial camera in Microsoft’s search engine Bing as well as Google Earth.
“We conducted both of their aerial oblique imaging programs in Australia for their 3D modelling services,” Deuter said.
So the stuff you see on Google Earth was flown by Aerometrex.
Historically aerial photography has been its bread and butter, but it has expanded its products over time. Aerometrex also offers 3D models and aerial surveys derived from aerial photographs as well as MetroMap – a subscription service with its imagery.
“Aerial photography is still a solid business it makes money, it’s a good business and we’re committed to it,” he said.
“Our 3D modelling service has world leading capability. We can see a transition from 2D to 3D – we think we’re at the front of it.
The company is in a strong position as it stands. In the last financial year it made $16.1m in revenue and a $2.57m net profit after tax.
While annual aerial imagery demand is $80-$90m in Australia, the company believes the global aerial imagery market is worth $1.4 billion and it wants a larger share of it – particularly in the US and Europe.
“We didn’t want to put the brakes on,” Deuter said.
“Since  the company has been on a growth trajectory and we could’ve elected to stay in private hands but we got to the point where we’re growing at 25-30 per cent compound annual growth rate.
“We just needed extra capital. We looked ahead at servicing our capital requirement – from our own earnings.
“The attraction of having your shareholder liquid is ideal. But primary reason is continuing to fund growth.”
In its IPO prospectus, the company noted these may be considered competing technologies but considered them inferior.
“A drone is simply a platform for a sensor and must be compared against larger scale solutions to form a view on cost-effectiveness,” Aerometrex said.
“There has been rapid growth in the number, sophistication and type of drones available in the market, but there are serious scale limitations with the technology, and drone operations are tightly regulated.
“There are specific instances in which a drone platform may be cheaper, i.e. for very small areas which require very frequent capture updates. However, the decision of which technology to use should always be based on product quality, accuracy, safety and cost-effectiveness.”
It also rejected satellite imagery, noting it captured at a relatively low resolution.