A recovering global economy has seen Internet of Things device developer TZ Limited (ASX: TZL) to increase its forecast earnings for financial year 2022 by $500,000.
New contracts have boosted the company’s annual recurring revenue outlook by 16% from $2.5 million to $3 million.
Purchase orders closed by its US business have also surpassed $11.3 million, keeping it on track to exceed $11.65 million for the current financial year.
A significant share of these funds will be recognised and completed in the 2022 period.
TZ is also anticipating a strong 12 months for its Australian business with final contract negotiations currently taking place on two projects relating to the supply of smart locks, electronics and associated software for over 6,000 day lockers.
Expected contract revenue is over $2 million for the collective hardware sales, with ongoing revenues of more than $150,000 per annum expected over a minimum term of three years.
TZ chief executive officer Scott Beeson said the positive outlook is a signal of a recovering marketplace as economies come out from under the COVID-19 cloud.
“We are being seen as offering best-in-class options to support the flexibility demands of the changed workplace,” he said.
“[Our current workload] demonstrates an increasing preference that customers have for cloud-based, fully-managed solutions which offer a bundle of services across hosting, monitoring, maintenance and software subscription.”
The growth in US and Australian sales pipelines shows little sign of slowing down.
“It provides a very positive outlook for our business over the coming period,” Mr Beeson said.
“Our focus on a recurring services business, software subscription licencing and locked-in annuity-based deals combined with an increasing preference for subscription-based offerings from our customers bodes very well for us to achieve the expectations for exponential growth in our everyday revenues.”
In April, TZ launched a non-renounceable rights issue to raise up to $7.06 million before costs with the proceeds directed at paying down the company’s debt.
Investors have the opportunity to buy TZ shares at $0.12 each, representing a 25% discount to the volume weighted average price over the 30 trading days prior to the rights issue being announced.
The issue will close on 7 June.