Geospatial software provider IQGeo (LON: IQG) generated organic growth of 64% in 2023 as contract wins in recent years contribute to growing annualised recurring revenues. The share price has risen 785% over the past five years, since IQGeo refocused on its geospatial business.
The success of the business is indicated by net recurring revenue retention of 133%, helped by cross-selling of products. Annualised recurring revenues increased by 50% to £21.3m.
AIM-quoted IQGeo has a core customer base of utilities and telecoms. Its software enables collaboration between the various divisions of these large businesses so that the group’s information and geospatial data can be used to build up a visualisation of all the assets in the business and where they are sited.
In 2023, revenues increased from £26.6m to £44.5m, while IQGeo moved from a small loss to an underlying pre-tax profit of £3m. Cavendish believes that this could improve to £5.5m on revenues of £49.8m this year. That shows the operational gearing of the business.
The share price moved to a new high of 407p. That is nearly 50 times prospective 2024 earnings, falling to 41 in 2025. That rating reflects the recurring nature of the core revenues and continued new contract wins.
