Why to look at 2 NZX tech stocks before 2022?

Highlights

• The technology sector is the second-largest income producer for NZ.
• Geo delivered the second-highest new sales quarter in preliminary Q1 FY22.
• Enprise experienced double-digit growth across all of its investee companies for 4 months ended 31 October 2021.

The technology sector is the second-largest income producer for NZ and one of the country's top three exporters with jobs rising at double the rate of the overall economy.

During the pandemic, the sector tried to flourish, and this growth has boosted demand for more talent. Following that, New Zealand's Minister for the Digital Economy and Communications stated that 600 specialised technology professionals would be granted border-class exemptions.

On this note, let’s have a look at 2 NZX tech stocks as the year ends.

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Geo Limited (NZX:GEO)

A Software as a Service (SaaS) business, Geo continued strong new customer growth and delivered the second-highest new sales quarter in preliminary Q1 FY22. New customer acquisitions rose 75%-85% on pcp.

The Group announced the completion of both of its earlier announced placements this month, ending its capital raising of $7 million. Capital was raised to strengthen GEO’s investment activities across ANZ and international markets.

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The Group expects that retention levels will return to long-run averages and new customer acquisition rates will pick up again after present lockdowns.

On 31 December, GEO ended the trading session 0.71% in green to close at $0.141.

Enprise Group Limited (NZX:ENS) 

Software and services investment company, Enprise, performed admirably during a difficult year, marked by market uncertainties caused by the COVID-19 pandemic.

For the four months ended 31 October 2021, ENS saw double-digit growth across all of its investee companies. However, it faced substantial cost pressures related to staff retention and recruitment, leading ENS to increase salaries across the Board.

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ENS is invested in fine businesses, of which 1 is Datagate Innovation Limited. Datagate has grown globally, particularly in its major market of the United States, with total recurring revenue hitting NZ$2 million by the end of October 2021 and the United States accounting for 63% of total recurring revenue.

Enprise plans to follow an ambitious growth strategy in coming years.

On 31 December, ENS ended the trading session at $1.4, down 4.11% from its previous close.

Bottom Line

In a time when other businesses are fighting to stay afloat due to COVID-19 uncertainties, the IT industry is doing well.

(NOTE: Currency is reported in NZ Dollar unless stated otherwise)