TZ Limited targets revenue growth and positive EBIT in 2022
TZ Limited (ASX: TZL) is continuing its rapid transition to positive earnings before interest and tax (EBIT) in 2022, with chairman Peter Graham saying the company will now provide monthly finance updates.
At the company’s annual general meeting for 2021, Mr Graham said he was “confident the company is on track” to realise its new growth strategies and increased revenue.
He said the company wants the market to closely follow its journey to positive EBIT.
As part of this, TZ will provide monthly recurring revenue (MRR) updates.
TZ’s current MRR is about $235,253 per month and Mr Graham says he is convinced of “strong growth”, with MRR figures also the “best indicator of performance”.
To transition TZ to positive EBIT, Mario Vecchio was appointed as chief executive officer in September.
Mr Vecchio reviewed the company’s traditional smart lock hardware and technology business model, and outlined a new direction that involved transitioning to a cloud-based software as a service (SaaS) and consumption business.
The path widens TZ’s revenue potential and previous reliance on uptake of its smart locking hardware, which generated “one time only” revenue payments upon completion of a fit-out.
Mr Vecchio’s strategy is that SaaS, subscription and service revenue will produce higher profit margins for TZ than its previous one-off device and licence sales.
At the recent 2021 annual general meeting, Mr Vecchio said TZ had “witnessed significant shifts” in the business during the December quarter – saying the company was advanced it its redirection to selling contemporary subscription services.
“Whether a large industrial enterprise, or global technology companies, customers come to TZ and stay with us because we are leading the way and reinventing three market sectors: the agile workplace, contactless commerce and e-commerce click and collect.”
“We’re building that future every day through innovative products that help our customers,” he added.
Leveraging technology and know-how
TZ has leveraged its technology to sell open platform software that can be connected to its own smart devices as well as those from third parties.
This is done using open gate application programming interfaces, which Mr Vecchio says can assume control of competitors’ locking devices using a “simple, low cost and non-disruptive process”.
“This unlocks new prospects and allows us to serve our existing customers better”.
“The journey of bring all our customers and prospects to comprehensive set of TZ cloud subscription services is now well underway,” Mr Vecchio added.