Tech turnaround! Adacel Technologies (ADA) [Archive]

tommy

06-10-2006, 06:09 PM

Here is a tech that has bounced back: Adacel Technologies (ADA). I have been topping up on this one due to complete lack of interest despite massive turnaround from last year. Here is the rundown:

Adacel Technologies Limited (ADA) develops advanced simulation and software applications and services for aviation and defense, providing simulators for training air traffic controllers in both civil and defense environments and for research, planning and modeling of air traffic procedures. The company also provides satellite-based air traffic management automation software for Oceanic airspace, as well as intelligent speech-driven systems for cockpit and simulator automation.

PE is only 9, market cap at 47 million. Undervalued probably due to lack of positive earnings history and lumpiness of contracts (timing issue like Senetas, if you know what I mean!) Despite the impressive list of contracts steadily won by ADA, one should however note that margins remain slim, despite improvements.

Strong profits and cash flow:
- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $5.64 million, representing a substantial turnaround from the EBITDA loss of $7.18 million incurred in the previous year

- An after-tax profit of $4.94 million (including a tax benefit of $1.01 million), an improvement on the after-tax loss of $9.84 million in the previous year

- A 40 per cent increase in group operating revenues to $52.39 million, of which recurring revenues account for more than 45%

- Net cash inflow from operations strongly rebounded to $5.91 million for the year from a cash outflow of $3.18 million previously.

- Balance sheet strength with net cash in bank position of $2.15 million and other current financial assets of $2.29 million.

Improved operating focus and continued market leadership
- Group result assisted by continuation of improved sales performance and margins in the June half with further improvements in operational focus, program performance and operating overhead control
- Continued market leadership within key market segments of air traffic control (ATC) simulation and air traffic management (ATM)
- Further progress in addressing closely-associated markets with new products and services based on the groupfs core simulation and voice recognition technologies.

* Reference:
A$2.5 million Tower Simulator order for US Marines
http://sa.iguana2.com/cache/cf4e495e3e86819d179491d72f6d06c2/ASX-ADA-252951.pdf

$2.9m contract extension from Lockheed Martin
http://sa.iguana2.com/cache/3312dc9a993330e0ab0ddbaa80c2affb/ASX-ADA-259230.pdf

Preliminary Final Report & News Release
http://sa.iguana2.com/cache/52c2835b7fed62af29346b2fc5c803e0/ASX-ADA-259931.pdf

A$4.7M US Air Force Simulator Upgrade Contract
http://sa.iguana2.com/cache/b713f4c02003770bc280872ede6df5d4/ASX-ADA-260104.pdf

Awarded A$4.6 million Portugal ATM support contract
http://sa.iguana2.com/cache/16b22df41c82a67bafc43751db438f05/ASX-ADA-260317.pdf

robbo

06-10-2006, 06:14 PM

Adacel

Good analysis Tommy.[^] Like it much more than when folks sortta, just down load a Web dump, with zero commentarey/analysis....

But, This was great. Thanks. [^][^]

What's the Market Cap?

Regards,

robbo :)

tommy

06-10-2006, 06:16 PM

http://australianit.news.com.au/articles/0,7204,20441734%5E15344%5E%5Enbv%5E15306-15321,00.html

US contracts lift Adacel out of a tailspin
Kevin Andrusiak
SEPTEMBER 20, 2006

ANYTHING to do with the aviation industry is more than just a touch risky at the moment.

High oil prices, the ever-present threat of terrorism and delays to new aircraft technology all make for an industry on unsteady ground.

And that's pretty much the environment that listed aviation technology firm Adacel Technologies found itself in about 12 months ago.

But with billions on offer from lucrative US defence contracts, Adacel was always a chance if could get the business model right. And it now looks to be on the right track.

Adacel listed on the Australian Stock Exchange in 1998, and shareholders endured five years of losses before a turnaround strategy last year saw it post a $4.94 million profit on a 40 per cent jump in revenues to $52.39 million. The Adacel board attributed the improvement to the establishment of a US-based management team, and a focus on core aviation, defence simulation and air traffic control operations based in North America.

"With the introduction of on-site personnel services, as well as annual support and maintenance, and ongoing air traffic management software support programs, recurring revenues have grown to account for more than 45 per cent of group revenues," new chief executive Fred Sheldon said.

"In North America, Adacel's position in the air traffic control simulation market was further consolidated during the period by contract awards from the US Air Force and US Marine Corps, the Federal Aviation Administration and the US aviation college sector.

"The company expects continuation of improved margins to contribute to a December half in excess of the first half of the 2006 financial year, and based on current opportunities and a continued focus on costs and profitability, an improved result in the 2007 financial year. However, group operating performance continues to be dependent on timing of contracts and deliveries, which will need to be closely monitored and managed."

Adacel calls itself a world leader in the development of advanced aviation and defence simulation, and software applications for air traffic controllers and satellite-based air traffic automation software.

The company boasts more than 100 clients in 30 countries, with the USAF chief among them. It is led by Harvard-trained Julian Beale, a former federal Liberal minister.

Adacel's biggest shareholder is Collingwood Football Club vice-president and son-in-law of cardboard billionaire Richard Pratt, Alex Waislitz, who controls a 34 per cent stake via his private company, Thorney Holdings. Mr Waislitz is also a non-executive director of Adacel.

With such luminaries on the board, investors would be right to demand a return to profitability, after the company posted five consecutive losses to kick off the decade.

And the board hasn't let them down.

Adacel's share price is up more than 75 per cent since July 1, 2005, reflecting its ability to switch focus to the North American market, where it established a new executive team and cut costs.

Company managing director Silvio Salom stepped down in June, after the return to profitability, to serve as a director. This paved the way for North American chief executive officer Fred Sheldon to run the company.

Latest results show sales are still just over half of what was reached during the 2002-03 financial year, but more importantly, profit margins are well up.

The financial year just gone was the first time it was profitable in five years, with short-term debt down to a measly $13,000 from $4.8 million in 2004-05.

It came after a horrible 2003-04 nearly wiped out all of Adacel's cash reserves, before a $6.5 million capital-raising saved the day.

In 2004-05, it posted an after-tax loss of $9.83 million on revenues of $37.29 million and earnings per share of minus 13c.

Its operating margin, too, has improved dramatically: 7.1 per cent last

tommy

06-10-2006, 06:24 PM

quote:Originally posted by davidrob

Adacel
What's the Market Cap?

Hi robbo,

Market cap is 47 million at the moment... quite cheap IMHO. What's your analysis mate?

tommy

10-10-2006, 05:06 PM

mmm, no price movement at ADA, actually quite surprised with the lack of interest. Gonna have to shove this one under the carpet and come back in six months time...

___
http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=E275137D-17A4-1130-F50F197E95476783

Adacel Identified As A Turnaround Play
FN Arena News - September 25 2006

By Chris Shaw

Since peaking at more than $4.00 per share in 1999 it has been a tough few years for Adacel Technologies (ADA), as shares in the developer of advanced simulation and control systems for the aviation and defence industries have fallen to around 50c following five consecutive years of losses.

Intersuisse suggests there is now an opportunity in the stock though, as FY06 marked a return to profitability and in the broker's view the potential rewards now outweigh the risks, justifying a Buy rating.

The profit turnaround in FY06 was seen as "impressive", as while revenues increased to $52.4m from $37.3m in FY05, the earnings before interest, tax, depreciation and amortisation turnaround was even better as the company moved from a loss of $7.2m to a profit of $5.6m, with net profit coming in at $4.9m including a $1m tax benefit.

In earnings per share terms the profit result equated to 5.6c, the broker anticipating further gains in coming years. As evidence of this, it notes the company's second half performance was far stronger than the first half, as while revenue was up 5.1% pre-tax profit was more than four times higher, reflecting better margin and cost performance.

The broker points out while a full year performance at a similar rate would represent earnings per share for FY07 of 7.9c, the uncertainty over the timing of contracts and a desire to take a more conservative stance has the broker anticipating an earnings per share result of 6.2c this year.

Such a result should be achievable as the company has enjoyed good recent success in scoring new contracts, the broker noting in the first half of FY06 $30m in new work was won, followed by a further $13m in the second half and more than $12m so far in the current quarter. Importantly the revenue gains appear more sustainable going forward, as the broker notes 45% of group revenue now takes the form of recurring revenues.

The company also stands to benefit from strong growth in its markets, as recent years has seen both an increase in the number of budget carriers entering the global aviation industry as well as strong growth from the Chinese market. This increases the need for air traffic controllers, the broker noting the company's training systems offer cost and time benefits in meeting this need. As a result, the broker is expecting strong earnings growth to continue for several years.

The FN Arena database shows none of the leading brokers or equity researchers cover the company, which is no surprise given its market capitalisation stands at only $44m at the current share price. Assuming solid earnings growth is achieved, and earnings per share of 7.9c this year would represent a price to earnings ratio of only 6.3x on the broker's estimates, it would suggest the stock stands to gain a wider following if it can deliver on its potential.

Adacel shares today are currently untraded, having last changed hands at $0.50.

tommy

16-10-2006, 05:01 PM

Annual report out:
http://sa.iguana2.com/cache/40d8bfc5173da74cc3c09b2720de75c3/ASX-ADA-263196.pdf

Very upbeat and positive outlook after making a significant turnaround, ADA is still under the radar and is cheaply priced IMHO.

Here is an excerpt:

Outlook

In the 2007 financial year, we expect a continuation of improved margins and will continue to focus on costs and profitability. On
the basis of this and the current opportunities, we expect earnings in the current December half to exceed those in the first half of the 2006
year, with the full 2007 financial year result a further improvement on the 2006 profit. The final 2007 result will be dependent on timing
of contracts and deliveries, which we will closely monitor and manage.
In the following years, we expect further growth in our markets.

In ATC Simulation we expect market growth to be driven in the US by the requirement for a significant increase in new controllers to replace a large number due to retire, and internationally by emerging markets such as China, India and the Middle East.

In ATM, with the FAA ATOP system now in the initial phase of operation in both the Atlantic and Pacific Oceanic flight regions, we
see further opportunities to upgrade the ATM systems of those countries managing adjacent Oceanic airspace.

In our Advanced Programs, our voice activated cockpit technology has significant potential in both military and civil aviation markets, while the market for our Air Traffic Control in a Box could grow quickly, driven by new standards being introduced for pilot training.

For the future, Adacel is strategically well placed, with excellent market position and a growing reputation for producing leading edge
products and services that meet a real market need.

tommy

18-10-2006, 05:02 PM

ADA starting to creep up despite low volumes (thinly traded...)

Sell side starting to look thin[:p]

tommy

22-10-2006, 04:01 AM

Intersuisse analyst report released:

http://www.intersuisse.com.au/upload/Companies/ADA22Sep06.pdf

Share price also on the rise[:I]
http://asx.netquote.com.au/charts.asp?code=ada&x=0&y=0

tommy

23-10-2006, 05:17 PM

ADA finally on fire, up 7%![:p][:p] yay

http://bigcharts.marketwatch.com/javachart/javachart.asp?symb=AU%3Aada&draw.x=0&draw.y=0

tommy

31-10-2006, 01:36 AM

Wow, why didn't they release this on ASX??? This is contract has enormous PR value in demonstrating ADA's technological superiority... how many aussie tech firms with market cap of just 55 million and PE of 11 win a contract from NASA?! I'm excited!!!

____________

http://mediaserver.prweb.com/pdfdownload/450011/pr.pdf

Adacel Awarded NASA Contract
Company to Upgrade FutureFlight Central Simulator

Orlando, Florida (PRWEB) October 13, 2006 -- Adacel, an industry leader in software integration, simulation development, and speech recognition technology, announced today that the company was awarded a contract to modernize NASA's FutureFlight Central Air Traffic Control/Air Traffic Management (ATC/ATM) test facility.

Adacel currently supports NASAfs FutureFlight Central by providing software for its state-of-the-art 360-degree MaxSim Air Traffic Control Tower Simulator.

Under terms of this new contract, Adacel will replace and reconfigure NASA's current 12-channel SGI system with its Vega Prime visual software (VMAX). This upgrade will include two additional Image Generation (IG) channels for independent eye-point views and a three channel IG system for their existing SGI Development Station. This latest upgrade allows NASA to view over 200 moving aircraft models simultaneously in one scene.

The VMAX software is installed in over 50 tower simulator locations throughout the world.

NASAfs FutureFlight Central is dedicated to solving the present and emerging capacity problems of the nation's airports. The two-story facility offers a 360-degree full scale real-time simulation of an airport, where controllers, pilots and airport personnel collaborate to optimize expansion plans, operating procedures, and evaluate new technologies.

gWe are very pleased to announce this new agreement and look forward to continuing to support NASA in their effort to modernize our countryfs airspace.h said Fred Sheldon, Adacelfs North American CEO. gNASAfs FutureFlight Central Facility performs world leading ATC/ATM research and it is without question that this contract represents a tremendous honor and privilege for Adacel.h

About Adacel
Adacel is a global software technology and systems integration leader. The company is a leading developer of critical aviation (air traffic management), speech recognition, and defense simulation and security systems for government and business entities. Support services are available for all products including full-time, on site maintenance and operation of the systems.

Adacelfs products can be found in more than 30 countries. The company is committed to innovative research and development and industry leading customer support.

Adacel was established in 1987. The Companyfs U.S. operations are headquartered in Orlando, Florida. Adacel has offices in Washington, D.C., Montreal Canada, and Melbourne Australia.

tommy

01-11-2006, 05:51 PM

ADA up another 6%[:p] Sell side thin...might hit 70c sooner than expected.

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AU%3Aada&draw.x=0&draw.y=0

tommy

01-11-2006, 06:12 PM

Wow up 11%, closed at 70c[:p][:p][:p]

Sitting on 30% profits now since opening this thread a few weeks ago, October wasn't bad afterall!

tommy

10-11-2006, 03:18 PM

ADA up 10% today, what da[:0]

Up 40% in a month, it's tempting to lock in profits now but is the spike due to anticipation of new contracts[?] Wetting my pants now[:I]

tommy

16-11-2006, 03:48 PM

2006 AGM Addresses:
http://sa.iguana2.com/cache/957b8f0535d779948b93fae47d03348a/ASX-ADA-265472.pdf

Good presentation, especially note that "In the current 2007 financial year we are continuing to achieve improved margins, and earnings for the first quarter are on track with our budget. We are expecting the current December half year will be better than the first half of the 2006 financial year with the 2007 result a further improvement on last year. These results will be in part dependent on timing of contracts and deliveries, which we will monitor and manage carefully."

Please do your own research[:I]

tommy

01-12-2006, 07:55 PM

http://www.usmc.mil/marinelink/mcn2000.nsf/0/4C9AD0C8F7B20A8E85257237002167B1?opendocument

ATC simulator: new tool for safer skies

MARINE CORPS AIR STATION IWAKUNI, Japan(Dec. 1, 2006) -- Smoke billows from the failed engine of the plummeting C-130 Hercules as it desperately tries to pull up. With the landing gear still locked in its great steel belly, the aircraft hits the runway and skids to an eventual halt into the industrial zone adjacent to the flight line.

Luckily, this scenario was just one of many created by the new Adacel Tower Simulator System, the most recent tool available to station air traffic controllers.

Equipped with the latest in computer technology, the simulator utilizes state-of-the-art 360 degree panoramic graphics and voice-activated controls to give users an authentic experience. Controllers wearing headsets give computerized pilots ATC commands that are followed by the digital aircraft.

Itfs a fully customizable piece of equipment; everything from the type of clouds to the position of the sun can be modified, said Master Sgt. Michael S. Andersen, Headquarters and Headquarters Squadron air traffic control tower chief and Seattle native.

The TSS is capable of simulating almost any situation that can occur on the flight line.

Being able to repetitively practice scenarios a controller does not usually encounter is one of the biggest advantages of having the simulator. During his first run on the TSS, Staff Sgt. Michael D. Damron, H&HS air traffic controller and Washington Courthouse, Ohio, native, was impressed with the equipmentfs capabilities.

gFor air traffic control, muscle memory is key,h Damron said. gHere we can simulate any scenario that a student may have a problem with. Youfre going to get a thorough application of rules you might not see on a day-to-day basis.h

For now, air traffic controllers only have the opportunity to practice on the simulator during the weekend or at night when the flight line is closed. Andersen, however, hopes to someday run the TSS every day.

gIdeally wefd like to have one of our permanent personnel assigned to this, but we have to have qualified people to do that,h said Andersen. gYou have to have someone that knows the system, knows ATC rules, is familiar with computers, and can build scenarios and think creatively. It takes a dedicated position, and that will be the next challenge.h

Even with its limited availability of use, Andersen feels the TSS is an asset to the station and a step up from the gold simulator,h a painted piece of plywood with plastic planes representing the stationfs aircraft.

Because the simulator is constantly providing the air traffic controllers with traffic, there is a constant upward learning curve. The end result is Marines are well-prepared in all aspects of their jobs, he said.

Flying Goat

20-12-2006, 09:58 PM

Hi Tommy

Just finished reading another investment book and one of the memorable and actionable quotes that stuck in mind was from Buffet, that you should start by getting to know every company on the index, when told how ridiculuos that was due to the number of listed companies, he said "well start at the A's". So true to form, knowing there are 1,888 companies on the ASX recently have been scouring the A's - knowing my own cirlce of comfort / competence it is easy enough to dismiss certain companies at a glance, and quickly identify the firms worthy of further investigation. So, now to the point.... (yes, there is a point, hooray!)

Arriving at ADA certainly piqued my curiousity. Why? In my opinion:

-Low price to earnings
-Diversified customer base (over 200 apparently)
-Over 45% recurring revenues
-Fast establishing "market leader" position
-Growing market
-Massive barriers to entry relative to other companies
-Improved margins / performance since new management

Concerns or worries?
-Some contract based revenue (never been a fan of "lumpy" earnings)
-Poor historical earnings record, poor historical margins
-I only superficially understand their market/product

Anyway, ran a search through good old sharetrader, and sure enough me old mate Tommy was there already and one step ahead as always! Nice to see you have already been profiting handsomely from this one, and I appreciate the research / articles that you have posted in this (albeit neglected!) thread. It is great becuase at a glance one can get a picture of the company's history etc... cool. Noticed that the SP dipped 5% today so am hoping that might open a little window of opportunity to get on board... as I am looking out for somewhere to re-invest some of these lovely chirstmas profits this crazy bull market is delivering us all :D

FG

tommy

20-12-2006, 10:14 PM

Hi FG,

Glad you like ADA too, this one is still under the radar for many investors and is very thinly traded. If they can demontrate full-year profitability again in the year ending June 2007, this will be re-rated massively.

Their competitive advantage is demonstrated by NASA's endorsement, so I have no worries about the superiority of their products.

But chart looks terrible at the moment
http://asx.netquote.com.au/charts.asp?code=ada&x=19&y=6
Might even be able to pick up below 60c at the going rate, looks like investors are collecting their profits to finance those big Xmas presents...hehehe

BTW, if you are starting with "A"s, make sure you check out an IT firm called ASG Group (ASZ), which is a bit expensive (PE ratio) but surely a no brainer growth stock with massive recurring revenue (disclaimer: I hold... if you are interested, read the ASZ thread I opened a while ago:
http://www.sharetrader.co.nz/topic.asp?TOPIC_ID=23821&SearchTerms=asz).

Good luck mate[:I]

tommy

22-12-2006, 04:26 PM

Still unloved by the market despite great announcement of yet another big contract:

http://sa.iguana2.com/cache/74ff1f48cfc3627662ab1217b79988d1/ASX-ADA-268075.pdf

21 December 2006
Company Announcements Office
Australian Stock Exchange

ADACEL PROVIDES A$2.1 MILLION OCEANIC ATM UPGRADE TO PORTUGAL

Adacel today announced a A$2.1 million data link and radar upgrade to Nav Portugalfs Oceanic Air Traffic Management system.
The latest upgrade follows the earlier completion of the enhancement of
Nav Portugalfs Oceanic Flight Data Processing and Visualization Systemfs computer hardware, operating systems and real time controller displays.

The NAV Portugal ATM system, which utilizes Adacelfs Aurora Oceanic ATM automation software, controls international air traffic in the Santa Maria Oceanic flight region of the North Atlantic. With this latest upgrade, Adacel provides software modifications to support Controller Pilot Data Link Communications and a gateway to display radar data to controllers from the recently installed radar in Santa Maria.

Flying Goat

27-12-2006, 09:37 PM

Hi

Is anyone other than Tommy and myself follwing this stock? I just got on today at 64.5 cents as I believe it to be an rather undervalued tech company much as ISS was few months ago, generating a strong profit, niche market, blue chip+ client base, recurring revenues, very good prospects going forward, yet trading on a pe <12. This is a much more volatile story than ISS however, if you read through much of what Tommy has posted above you will quickly get a feel for the risks due to its unprofitable past, but the further i delve the more I agree with tommy's subject line that this is a classic turnaround story, new management in North America have focused on core activities and discontinued the non-core activities that were chewing up cash not really adding to the bottom line. Since the new management took over there has been a strong sense of accountability to shareholders in terms of margins, profit, and focusing on core activities... The only thing I don't like is the lack of liquidity, was looking through the share regsiter on their annual report and noticed that just under half of the company is tied up with substantial holders, meaning that more than half the company is floating out there among minority holders... so I wonder, why is this stock so illiquid?? That is not rhetorical by the way, if anyone has any idea would be keen to hear it. This thread is rather lonely, so post your thoughts on it if you have any...!!

FG:)

Flying Goat

28-12-2006, 07:03 AM

Thanks for clearing me up on the major shareholder stake AA! Good points about the iliquidity too, was a bit difficult getting in, but could work well as other want to get in later. Yes, it is an interesting looking stock, great barriers to entry....

FG

Flying Goat

04-01-2007, 06:35 PM

Hmmm, no shortage of contract announcements here.. another big one out today. Good to see the market responded well, and on much better volumes... should be an intersesting result in 2007. One more year of profit and growth should equal re-rating by the end of 2007...??? Hope so!!

FG:)

tommy

24-01-2007, 06:07 PM

Hi FG and AA,

Here's another contract win by still-largely ignored ADA[:p] Very good news, and re-rating is now way overdue, chart is looking good so let's hope it breaks 75c soon:

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AU%3Aada&draw.x=33&draw.y=14
____

http://sa.iguana2.com/cache/b5b6f505eefea356580b18cd4fa19bf4/ASX-ADA-269252.pdf

A$5.25 MILLION SIMULATOR CONTRACT FROM AIRSERVICES AUSTRALIA

Adacel has been awarded a A$5.25 million contract by Airservices Australia to provide and support control tower simulators for training Australiafs next generation of air traffic controllers.

Under the contract, Adacel will provide a MaxSim tower simulator with a 360 degree field of view and three MiniMax 240 degree systems. The contract also includes warranty and support for four years.

Additional information is included in the attached News Release.

Adacel Technologies Limited
Mike Woodgate
Company Secretary

NEWS RELEASE

Melbourne, 24 January 2007
ADACEL AWARDED A$5.25MILLION AIRSERVICES TOWER SIMULATOR CONTRACT

Adacel has been awarded a A$5.25 million contract by Airservices Australia to provide and support control tower simulators for training Australiafs next generation of air traffic controllers.

These simulators will be placed at the Airservices College at Tullamarine and provide more efficient and effective training of tower controllers through the use of the full immersion simulator and the mini simulators.

Under the contract, Adacel will provide a MaxSim tower simulator with a 360 degree field of view and three MiniMax 240 degree systems. The contract also includes warranty and support for four years.

Adacelfs simulation systems will permit the development of higher skill levels at an earlier stage in controller training through concentrated coverage of required capabilities in a non-operational environment, reducing the time required in operational centres.

Airservices Australia will also use the capabilities of a Control Tower Simulator to analyse and evaluate operational/procedures modelling, airfield modelling, tower configuration modelling, aerodrome emergencies, and incident investigations.

About Adacel
Adacel Technologies Limited is a leading developer of advanced simulation and control systems for aviation and defence. Since its establishment in 1987, Adacel has built an international reputation for its products and services through a commitment to technological leadership and customer support. From advanced simulation to air traffic management and voice recognition systems, training and professional services, Adacelfs products can be found in more than 30 countries. Adacel is listed on the ASX (Code: ADA) and can be found on the Web at www.adacel.com.

Flying Goat

24-01-2007, 07:37 PM

Hi Tommy

Indeed there is no shortage of contracts and recurring work going on with ADA, it surprises me also that the market has yet to truly acknowledge that this turnaround is a done deal. Recently have been topping up on ADA after looking them further, as in my view the barriers to entry in their airspace are huge, also while the downside is limited the potential upsides in terms of voice recognition and commercial aviation could be massive. This is a cheap growth stroy with twenty years of research, development behind it and solid revenue streams and global market leadership ahead of it. If you have not done so already Tommy, take a look at the ADA thread on sxhxaxrxexsxcxexnxe.com (take away the x's and you will have the address). If you read the posts that have been ongoing since 2004 there is quite a lot of good information there, a poster by the name of 'ouoisa' has quite a good knowledge of the ADA and their customers, competitors and market position, and has been pretty comitted to them through the ups and downs. There is some interesting ADA reading in that thread.

Cheers

FG:)

tommy

24-01-2007, 07:57 PM

Hi FG,

Thanks for the info on another website mate, I will check it out[:I]

However, ADA might not skyrocket until the half-year results are released simply due to lack of attention... yawn. Not complaining though, it allows us to accumulate more of this tightely held illiquid stock:)

I too am very comfortable with my ADA holdings, and IMHO, share price of 72c, PE of 12 and market cap of 60 million is absolutely rediculous!! The steady stream of contracts (look at the quality of clients, size of each contract and resulting recurring revenue!) has GROWTH written all over it.

ADA has consistently been winning new contracts, and will undoubtedly continue to win more. So I agree with you in that downside is minimal and there is a HUGE upside!

OneUp

26-01-2007, 02:46 AM

ADA received quite a big tax benefit last year.

NPBT = 3.9m
Add: tax benefit of 1.0m
NPAT = 4.9m

If Adacel had paid corporate tax of 30% its NPAT would have been 2.7m

IMO a P/E should really be based on continuing operational earnings. With a market cap of $62m Adacel is trading on a "normalized" P/E of 23 or a P/NPBT ratio of 16. Might explain why the shares appear so cheap on reported earnings.

tommy

26-01-2007, 05:52 PM

quote:Originally posted by OneUp

ADA received quite a big tax benefit last year.

NPBT = 3.9m
Add: tax benefit of 1.0m
NPAT = 4.9m

If Adacel had paid corporate tax of 30% its NPAT would have been 2.7m

IMO a P/E should really be based on continuing operational earnings. With a market cap of $62m Adacel is trading on a "normalized" P/E of 23 or a P/NPBT ratio of 16. Might explain why the shares appear so cheap on reported earnings.

Hi Oneup,

I think whether the current price level is low or not will ultimately be determined when the half year results announcement gives some kind of indication of the size of earnings for the full year.

ADA is no longer led by dud management, so if the new management can show that it has truly turned around the company by moving into the black two years in a row, the share price should be rerated... especially considering that there will be more demand in this sector in the years to come! Keeping my fingers crossed;)

Flying Goat

29-01-2007, 11:57 AM

quote:Originally posted by OneUp

ADA received quite a big tax benefit last year.

NPBT = 3.9m
Add: tax benefit of 1.0m
NPAT = 4.9m

If Adacel had paid corporate tax of 30% its NPAT would have been 2.7m

IMO a P/E should really be based on continuing operational earnings. With a market cap of $62m Adacel is trading on a "normalized" P/E of 23 or a P/NPBT ratio of 16. Might explain why the shares appear so cheap on reported earnings.

Hi OneUp

Yeah, that is a valid point that you raise and does explain why the appear so chaep on the face of it. However, my thoughts are leanig towards their ability to achieve an operating profit this financial year of around $5 million based on contracts booked to date and trend for improved margins on all contract and support work (coupled with less money being burned on non-core activities). Thus if they can achieve this the operating profit would be up about 25-30% and the forward pe would be around 12, but i concede that result rests on my assumptions, which may be viewed as optimistc. Anyhow, if this is the case, my thoughts still are the have a very defensible position in the markets in which the operate, and very few listed companies could boast the barriers to entry inherent with ADA...

Cheers

FG

tommy

30-01-2007, 07:10 PM

Boardroomradio is pleased to announce that Adacel Technologies Limited (ASX: ADA) has published an audio file. The following presentation "A$5.25 million simulator contract from Airservices Australia" is now available as an instant audio download to your computer. You may also transfer this information to your listening device as an IPod podcast.

http://www.acnnewswire.net/press/en/34959/ADACEL-TECHNOLOGIES-LIMITED.html

tommy

13-02-2007, 03:53 PM

Yay:)

A$4.5 MILLION US AIR FORCE SUPPORT CONTRACT EXTENSION

Adacel has received a further one year extension to its Tower Simulator support contract with the US Air Force, which will now also include support for Adacel tower simulators operated by the Federal Aviation Administration and US Marine Corps.

The contract option under the USAF Training Systems Support Center/
Contractor Logistics Support (TSSC/CLS) contract is valued at A$4.5 million (US$3.5 million) and is for the fifth year of support for what is projected to be a 10-year Tower Simulator System life cycle.

Additional information is included in the attached News Release.

Adacel Technologies Limited

Mike Woodgate
Company Secretary

[]bNEWS RELEASE
Melbourne, 13 February 2007
FOR IMMEDIATE RELEASE
A$4.5 MILLION US AIR FORCE SUPPORT CONTRACT EXTENSION[/b]

Adacel has received a further one year extension to its Tower Simulator support contract with the US Air Force, which will now also include support for Adacel tower simulators operated by the Federal Aviation Administration and US Marine Corps.

The contract option under the USAF Training Systems Support Center/ Contractor Logistics Support (TSSC/CLS) contract is valued at A$4.5 million (US$3.5 million) and is for the fifth year of support for what is projected to be a 10-year Tower Simulator System life cycle.

Under this contract option Adacel will maintain responsibility for the maintenance and support of over 100 USAF tower simulators located at sites worldwide as well as FAA and USMC tower simulators. Services will include: configuration management and documentation, maintenance and update of software baselines, 24/7 on-call support,system repairs, spares management and reporting.

gWe have worked with the US Air Force, the FAA and the Marine Corps to ensure that their systems are continuously and seamlessly supported, and this contract extension demonstrates the confidence they have in Adacel,h said Fred Sheldon, Adacel CEO North America. gWith Adacel, our clients get a comprehensive long term solution.h

As part of the TSSC/CLS, Adacel will also provide a web-based Integrated Data Environment. This environment provides Adacel and the customer direct access to all support related documentation as well as contract plans, technical documents and performance metrics.

Adacel is the leading provider of air traffic control training simulators worldwide. Adacelfs radar and visual control tower training products are used by: NASA, the U.S. Air Force, Army and Marine Corps, the Federal Aviation Administration as well as over thirty air navigation service providers around the world.

About Adacel

Adacel Technologies Limited is a leading developer of advanced simulation and control systems for aviation and defence. Since its establishment in 1987, Adacel has built an international reputation for its products and services through a commitment to technological leadership and customer support. From advanced simulation to air traffic management and voice recognition systems, training and professional services, Adacelfs products can be found in more than 30 countries. Adacel is listed on the ASX (Code: ADA) and can be found on the Web at www.adacel.com.

Flying Goat

14-02-2007, 07:36 AM

Thanks Tommy,

More good news but looks like someone is selling ADA down at the moment for whatever reasons? Not to phased by this myself but hope that the selling is not based on any fundamental negatives we don't know about??!

Cheers
FG

tommy

14-02-2007, 03:11 PM

Hi FG,

Yeah, chart looks terrible and sell side is bigger than buy side[xx(]

http://asx.netquote.com.au/charts.asp?code=ada&x=0&y=0

I'm still holding, but I have no knowledge either of what can be causing the sell down.

That said, this stock is illiquid and tightly held so a few people wanting to get out is enough to send the stock down. Say you threw in 20k now, ADA would bounce back to 70c if you know what I mean...

Not worried at this point (YET) because they are winning contracts steadily. Some people must be selling out due to impatience with lack of price movement.

Fingers crossed

[:I]

tommy

26-02-2007, 03:17 PM

Turnaround has been confirmed... ADA is DIRT CHEAP at the current price level, it should be rated at least around 80c!!!! PE is still 10, WTF?!!! I was worried about fall in revenue, yet they managed to increase profits. Things are obviously under control on the margin/cost side, which had always been a problem under previous management.

ADA new management is steering the company in a very solid way, turning to annuity-stream-based revenues (now over 50%), and high barriers to entry will continue to make ADA the market leader in this niche field (tell me any other microcap tech firm that is endorsed by NASA!!)

I am a happy holder.

SIGNIFICANT INCREASE IN PROFIT IN HALF YEAR TO 31 DEC 2006

The Directors of Adacel Technologies Limited today announced the results for the six
months to 31 December 2006:

- Earnings before interest, tax, depreciation and amortisation (EBITDA) of $3.5 million, a 116% increase over EBITDA of $1.6 million previously, assisted by improved program performance, lower corporate costs and higher R&D assistance

- An after-tax profit of $3.3 million (including a tax benefit of $0.5 million), a 121% increase over the prior period result of $1.5 million (including a tax benefit of $0.7 million)

- Strong and flexible balance sheet with $4.0 million cash in bank and an enhanced North American banking facility

- Contracted development work continues on core systems for high profile programs including key US air traffic management programs and the Voice Activated Cockpit for the multinational F-35 Joint Strike Fighter - an aircraft earmarked for the air forces of the US, Australia and other countries globally

- Ongoing development of new products in complementary market niches,
including voice activated cockpit opportunities in other defence and civil aircraft and the integration of our Air Traffic Control in a Box product into full flight simulators

A summary consolidated income statement for the group is outlined below.

Adacel Group Results for half year to December 31
A$000 2006 2005

Revenue from continuing operations 17,575 25,422
Other Income 1,490 222
EBITDA 3,476 1,611
Amortisation & depreciation 684 739
EBIT 2,792 872
Finance costs 49 129
Profit/(loss) before tax 2,743 743
Tax benefit 525 735
Profit/(loss) after tax 3,268 1,478

Adacel has maintained its strong leadership position in its key markets during the December half and delivered an after-tax profit increase of 121% to $3.3 million (previously $1.5 million).

Directors said the improvement in financial performance was largely attributable to:
- Improved program performance with recent programs being secured on higher margins;
- Government R&D assistance relating to the ongoing development of the voice activated cockpit for the multi-national F-35 Joint Strike Fighter program;
- The impact of improved performance on warranty programs and the impact of additional profit booked on finalisation of programs that performed better than budget; and
- Reduced corporate overheads.

The result was after a tax benefit of $0.5 million (previously $0.7 million), which again resulted largely from benefits relating to the companyfs ongoing R&D program.

Revenues remained strong in the key US market, but with the completion of a large international program during FY2006, group operating revenues for the December half declined to $17.6 million compared with the previous level of $25.4 million. However, revenues from recurring programs levels continued to be strong and represented in excess of 50% of total operating revenues for the half year. Directors also said the
company is seeing evidence of further on-site and after-market support programs which should continue to drive annuity income streams for the company.

Directors have not declared a dividend for the period.
Operating Performance Adacelfs CEO North America, Fred Sheldon, said today that the company continued to maintain its strong market position during the period.

gIn the Simulation business, Adacel continued to

Zephyrus

26-02-2007, 04:28 PM

If they had to pay full tax Tommy, thier PE would be around 14...

Flying Goat

26-02-2007, 04:57 PM

Hi Tommy and Zephyrus,

Tommy, yeah was pleasing alright, main concern has been margin/costs in the past but as you stated the margins are looking MUCH healthier, looks like we have a good business model on our hands... I'm also a happy holder!

:)

Zeph, if what they say is true regarding this years full year result being above last year's, but without the large tax benefit from accrued losses (but with small tax benefit from R&D) then ADA should be trading in the 10 to 12 times earnings range, well below the sector average of 16, although some might argue they deserve a higher rating due to the major barriers to entry and diversified long standing customer relationships.

FG

tommy

26-02-2007, 05:41 PM

Hi Zephyrus and FG,

Share price of ADA still subdued and sell side a lot thicker than buy side... yawn. When will this take off? Have we seen the bottom now?
mmmmmmmmmmmmmmmmmmm............

Here's da chart:
http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AU%3Aada&draw.x=0&draw.y=0

______________________
http://australianit.news.com.au/articles/0,7204,21287966%5E15344%5E%5Enbv%5E15306-15321,00.html

Adacel sales slide 30pc
Ben Woodhead
FEBRUARY 26, 2007

COST cutting and research and development grants have helped Adacel more than double its net profit to $3.3 million during the first half of the 2007 financial year but company was unable to stave off a 30 per cent sales slump.

Adacel reported that net profit for the six months to December 31 increased from $1.5 million to $3.3 million while revenue slipped from $25.4 million a year ago to $17.6 million.

The result came as the company bedded down changes to its operations that were implemented over the past few years as part of a major restructure that resulted in the aviation software maker's withdrawal from a number of markets.

Continued cost savings helped drive up earnings growth and Adacel's North America chief executive, Fred Sheldon said that the company's first half profit was also buoyed by a government R&D grant associated with the F-35 Joint Strike Fighter project.

Adacel is developing voice activated cockpit technology for the controversial F-35 program.

Mr Sheldon said that the decline in first half revenue was largely due to the completion of a number of large projects, but he said Adacel expected its full year result to outstrip the company's 2006 performance.

"The company expects that with continuation of the improved operating performance, higher margin programs and lower corporate costs, the group result for the 2007 financial year will be above that achieved in 2006," Mr Sheldon wrote Adacel's half year report.

"Group operating performance continues to be dependent on timing of contracts and deliveries, which will be closely monitored and managed."

Adacel finished the half with $4 million in cash, up from $1.1 million in the previous corresponding period.

tommy

27-02-2007, 03:30 PM

Almost bottomed out? mmm...

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AU%3Aada&draw.x=32&draw.y=17

tommy

04-04-2007, 02:10 PM

FURTHER US SIMULATOR CONTRACTS TOTALLING A$2 MILLION

Adacel has received further orders from the US Federal Aviation Administration and the US Marine Corps for air traffic control tower simulators and support. The two new orders total A$2 million (US$1.6 million).

Under the agreement with the FAA, Adacel will provide an additional MaxSim Tower Simulator System plus additional databases and onsite support. This will bring to fifteen the number of Adacel simulators operated by the FAA.

Under the latest US Marine Corps order, Adacel will supply two additional systems and an additional database, bringing total Marine Corps procurement to nine MaxSim simulators and ten databases. The tower systems are being acquired by the Marine Corps as an option under a contract announced in October 2005.

Further information is included in the attached News Release.

Adacel Technologies Limited
Mike Woodgate
Company Secretary

ADACEL AWARDED SIMULATOR CONTRACTS
BY US FAA AND MARINES

Adacel has received further orders from the US Federal Aviation Administration and the US Marine Corps for air traffic control tower simulators and support. The two new orders total A$2 million (US$1.6 million).

Under the agreement with the FAA, Adacel will provide an additional MaxSim Tower Simulator System for Sky Harbor International Airport in Phoenix, Arizona, plus additional databases and onsite support.
This latest procurement will enhance the FAAfs operational air traffic control tower simulation training program in Phoenix. The FAA already hosts fourteen Adacel Tower Simulation Systems.

Ten Adacel systems are located at the Mike Monroney Aeronautical Center (FAA Academy) in Oklahoma City in support of the Tower Cab training program, one is located at the William J. Hughes Technical Center (FAA Tech Center) new Atlantic City,

New Jersey, for airport analysis and development, and three more are at operational control facilities in Chicago, Miami and Ontario, California.

Under the latest US Marine Corps order, Adacel will supply two additional MaxSim simulators to enhance training capabilities at USMC Air Stations in Futenma, Japan and Quantico, Virginia, with an additional database to be provided for Bogue Field, NC. The
tower systems are being acquired by the USMC as an option under a contract announced in October 2005. The latest order brings total Marine Corps procurement to nine MaxSim simulators and associated databases.

Adacel is the leading supplier of ATC tower simulation systems for the United Air Force, United States Army, and the Federal Aviation Administration, Civil Aviation Authorities in Europe and the Middle East, as well as many of the most prestigious aviation universities in the world.

About Adacel
Adacel Technologies Limited is a leading developer of advanced simulation and control systems for aviation and defence. Since its establishment in 1987, Adacel has built an international reputation for its products and services through a commitment to technological leadership and customer support. From advanced simulation to air traffic management and voice recognition systems, training and professional services, Adacelfs products can be found in more than 30 countries. Adacel is listed on the ASX (Code: ADA) and can be found on the Web at www.adacel.com.

tommy

04-04-2007, 02:17 PM

http://www.pr-inside.com/new-faa-oceanic-air-traffic-system-r84646.htm

New FAA Oceanic Air Traffic System Designed by Lockheed Martin Fully Operational

2007-04-03 19:43:08 -

ROCKVILLE, Md., April 3 /PRNewswire/ -- The Federal Aviation Administration's Advanced Technologies and Oceanic Procedures (ATOP) system, developed by Lockheed Martin , is now fully operational. The Anchorage Air Route Traffic Control Center in Alaska, the last of three FAA sites transitioning to ATOP, successfully completed its transition in March.

"With the center at Anchorage becoming fully operational, the ATOP system promises major benefits for air traffic controllers and ultimately for airlines," said Sue Corcoran, vice president of Aviation Solutions for Lockheed Martin. "We are proud to have
helped the FAA meet its challenge to create a system that increases efficiency and oceanic airspace capacity to meet growing international air traffic demands."

The Anchorage center, which successfully transitioned its sectors on March 1, is the first ATOP site to use the radar functionality of the system. As a result, the ATOP system is capable of operating both non-radar and radar separation. Air Route Traffic Control Centers in Ronkonkoma, N.Y., and Oakland, Calif., deployed ATOP technology in 2005 for the Atlantic and Pacific regions.

The system provides safe separation of aircraft in areas outside radar coverage or direct radio communication, such as over the ocean. It detects conflicts between aircraft, provides satellite data link communication and position information to air traffic controllers, and significantly reduces the intensive manual process that limited the flexibility of controllers to safely handle airline requests for more efficient tracks over long oceanic routes.

By allowing controllers to proactively manage airspace, the ATOP system is enabling them to be more responsive to airspace user requests. For example, during one 12-month period since the system went operational at the New York center, ATOP allowed controllers to grant 90 percent more altitude change requests. Aviation industry experts analyzing oceanic flights linking the United States to the Caribbean Islands and South America have estimated that ATOP will save airlines nearly $8 million per year, while annually conserving slightly less than 6.5 million pounds of fuel.

Before ATOP, oceanic flights were manually guided with the help of paper flight strips, and controllers were required to separate flights by up to 100 nautical miles. With ATOP, controllers have the ability to reduce separations to 30 nautical miles for properly equipped aircraft, allowing the FAA to reduce delays, support fuel-efficient routes, and accommodate increased international air traffic.

Supporting Lockheed Martin on the ATOP program are Adacel, a supplier of oceanic automation software; Airways Corporation of New Zealand, the first air navigation service provider to apply communications, navigation, surveillance and air traffic management (CNS/ATM) technology developed specifically for the oceanic environment; and Sunhillo Corporation, provider of the external communications server, which provides access to external data interfaces. Lockheed Martin was awarded the ATOP contract in June 2001.

Headquartered in Bethesda, Md., Lockheed Martin employs about 140,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The corporation reported 2006 sales of $39.6 billion.

Flying Goat

20-04-2007, 07:59 PM

Hi,

Anyone wondering about the interest in this one today, they had a very favorable write up in the AFR Smart Investor magazine out today for subscribers. Still looking like super cheap technology at 8 times earnings, just hope they can come the deals coming through 07/8.

Disc; still holding, don't see much risk - but plenty more upside...

FG

tommy

21-04-2007, 02:43 PM

Hi FG,

ADA is such an unloved (and boring) stock... release of full-year results confirming profitability two years in a row will lead to a re-rating, but I doubt anything will happen before that.

Major contract wins have failed to excite the market unfortunately (YAWN!)

That said, I love ADA and although I temporarily sold out (needed a bit of pocket money for quickie trades) I will definitely get back in before the full year results.

My only concern is... do they currency-hedge? Can't remember, if they don't, exchange loss will have to be factored in.

Flying Goat

23-04-2007, 07:46 PM

Tommy,

Today's new contract takes the order book to nearly $15 million for this half. Nice response from the punters, guess having caught attention of AFR Smart Investor was helpful and well timed too though.

FG

tommy

24-04-2007, 05:10 PM

Hi FG,

New contract win and AFR coverage indeed seem to have helped, but a bit of a pullback (3%) today after yesterday's massive 12% rise.

Still very undervalued[:I]

tommy

11-05-2007, 03:59 PM

Up 12% today, what da[?][:0][:X]

Any news?????????????????????????????????????????

Flying Goat

11-05-2007, 06:59 PM

Yup.. and on way above average volume! Smell another contract anyone??

Flying Goat

11-05-2007, 07:01 PM

Actually Tommy make that 14% on turnover of 300,000 shares!?!

Flying Goat

24-05-2007, 09:03 PM

Hmmm... this is becoming a popular stock, and real reward for the patient!!

tommy

24-05-2007, 09:14 PM

Glad I'm not the only one who likes ADA, this stock is STILL dirt cheap at the current levels. Can't wait for the full-year results[:I]

Flying Goat

25-05-2007, 11:59 AM

Tommy Mate,

If you get a chance, watch the bulls come out of the pen this morning on the latest news about new market that was issued pre-open...!

tommy

25-05-2007, 03:08 PM

Hi FG, yeah, contract value is small (1 mil in year 1) but still not bad. ADA is truly a gem in this recession-proof niche market with high barriers to entry and they have no problem winning contracts! Recurring revenue of this type adds more stability to income in the coming years.

ADACEL AGREEMENT WITH CAE OPENS UP MAJOR NEW MARKET FOR ADACEL

Adacel has signed a five-year exclusive licence agreement with CAE, a world leading provider of simulation technologies and training services, for the use of Adacelfs automated air traffic simulation environment in new and recently deployed CAE full-flight simulators and flight training devices.

The agreement is a major step in launching Adacelfs ATCiB (Air Traffic Control in a Box) technology into the large international pilot training market. Adacel has estimated that the market for simulated ATC environments in commercial, military and private pilot training could be up to A$50 million over the next eight years.

Under the terms of the agreement, CAE may offer to sublicense Adacelfs
technology to its customers as an optional integrated feature with CAEfs simulation products. The licensing agreement is valued at more than A$1.1 million to Adacel during its first year of operation, which is expected to begin near the end of calendar year 2007.

Adacel Technologies Limited
Mike Woodgate
Company Secretary

tommy

01-06-2007, 06:09 PM

ADA getting ready for the next leg up?

http://bigcharts.marketwatch.com/interchart/interchart.asp?symb=AU%3Aada&draw.x=30&draw.y=11

Flying Goat

02-06-2007, 10:45 AM

Hi Tommy,

I would say this will show up on the radar for institutional investors any month now based on fact that market cap is heading toward $100m and the risk side is fast diminishing as they continue to book contracts and the announcement last week that their software will be used in CAE (worlds number one manufacturer of aviation simulation products) that will result in guaranteed licensing revenue stream - that could be as much as 50 million over the next eight years. With $35m booked in contracts this half alone, following a strong first half and trading at more than 30% discount to it sector, it is no wonder Intersuisse still have a buy at 80 cents, could be worth over a dollar soon I would say.

FG

Flying Goat

28-06-2007, 10:09 PM

I wonder if ADA will be looking at starting dividend payments with their pending announcement for full year results?? It would appear they hold sufficient cash as working capital and are starting to generate respectable free cash flows? Hope that we see either dividends or share buy back over the next few years, otherwise not sure what they will do with the free cash.....??

tommy

29-06-2007, 03:15 AM

quote:Originally posted by Flying Goat

I wonder if ADA will be looking at starting dividend payments with their pending announcement for full year results?? It would appear they hold sufficient cash as working capital and are starting to generate respectable free cash flows? Hope that we see either dividends or share buy back over the next few years, otherwise not sure what they will do with the free cash.....??

Hi FG,

Although dividend payments are always an attractive way to lure new investors especially instos, I personally would prefer them to spend that money into more marketing/product development efforts to further enhance their dominance in this niche marketplace.

During last first half, they managed to increase profit despite fall in sales by putting costs under control, which confirmed the new management's ability to transform the company into a lean & mean, focused tech firm with an incredible clientele list (esp. NASA!)

But Adacel is still a premature turnaround story, and so I would rather see them boost BOTH sales and profits first to confirm that they are able to pay out a dividend on a continual basis rather than a one-off event.

Nothing is worse than a company declaring a dividend only to resort to capital raising in the next 12 months, I hate dilution of shareholder value!!

Anyway, Adacel is one of my favorite undervalued tech stocks with massive growth potential on a global scale in this niche market. Due to the increasing proportion of recurring revenue, their cash flows should become more predictable as they depend less on one-off contract revenue. If they record good second-half results, turnaround will truly be confirmed and re-rating based on forward PE (rather than backward PE) should occur in the very near future.

In the meantime, ADA will hover around at these levels for a while, it is such a boring stock for traders[}:)]

tommy

13-07-2007, 05:22 PM

What da... turnaround stalled!

http://sa.iguana2.com/cache/3e0e851ac81ee72c118da2165441a049/ASX-ADA-279143.pdf

Gutted:(

_Michael

10-12-2007, 07:13 PM

New contract announced today

$A 3.7 Million Dollar European ATC Simulator

They are currently buying back 10% of issued shares after dissapointing 2H 2007 sent the price plunging. Cornerstone shareholders including Thorney Investments remain substantial holders and have not sold any shares. They now have multiple revenue streams not least a longterm pure license agreement with CAE (worlds number 1 flight simulator manufacturer) for using ADA software in their products as an add-on option for end users. They are also building a steady stream of longterm support/maintence revenue which now represents more than 50% of revenue. This has been a dissapointing company in the past but my personal view (disc; i've held for quite a while now) its in a safer place than its ever been in terms of outlook for longterm sustainable earnings streams - they are also world leaders in their field as a result of decades R&D which makes barriers to entry high. Worth researchng further if you like oz-tech stocks.

cheers
Michael

_Michael

16-12-2007, 12:22 PM

Looks like Thorney have been doing more Christmas shopping this week....

http://www.asx.com.au/asx/statistics/announcementSearch.do?method=searchByCode&issuerCode=ada&timeFrameSearchType=D&releasedDuringCode=W

This month they rasied their stake from 36% to 38% and they also opted for a share nuyback rather than a capital return which will boost their holding even further.

With representation on the board they i doubt they would be going down this road if they did not believe there to be long term value... and makes one wonder if there is any intention of evetually taking the company private....??

cheers
michael

Lizard

20-12-2007, 03:22 PM

Long anticipated FAA order obtained. Value $A55.8m. :):):)

(I think that order exceeded the company market cap prior to the announcement? Not now though...)

_Michael

20-12-2007, 05:51 PM

Correct Liz, market cap was below $50m this week - and yesterday stated intention to continue buyback so EPS potential longterm is looking good. Not even factoring in the longterm license revenue ATCiB which will start kicking in over the next few years....

A great day for ADA - expect it will get some media attention soon as its still been flying under the radar really, no pun intended...

_Michael

21-12-2007, 08:25 AM

My guess is that ADA will get some decent media attention out of this....

and attract some mainstream analysts to get their head around the business,

then bring on the march past $1.00 in the new year!

tommy

21-12-2007, 03:59 PM

Hi all,

Good to see there are still people interested in Adacel after a period of poor performance. The latest FAA contract is encouraging indeed, and IMHO should lead to further contracts with FAA in the future.

Question is, will it be able to contain the costs? The previous management always had a problem with margins, although the new management seems to be making improvements in this field. Another challenge may be the exchange rate: weak US dollar naturally will result in lower AU$ revenue than otherwise expected.

Anyway, the FAA contract of this size is certainly monumental for a company with a market cap of less than 60 million.

Let's wait for the details to be announced :-)

At volatile times like this, ADA is a good defensive play with plenty growth potential for a number of reasons:
ADA is a leader in an industry with high barriers to entry
ADA does a lot of business with government funded organizations (public sector is good at times of recession)
ADA's clients are blue chip (Lockheed, NASA, FAA, etc.)
ADA is in an industry that has growing demand for its products

_Michael

21-12-2007, 05:03 PM

At volatile times like this, ADA is a good defensive play with plenty growth potential for a number of reasons:
ADA is a leader in an industry with high barriers to entry
ADA does a lot of business with government funded organizations (public sector is good at times of recession)
ADA's clients are blue chip (Lockheed, NASA, FAA, etc.)
ADA is in an industry that has growing demand for its products

...and ADA has diversified products each with immense potential in its own aviation support sub-category.

Nice to see you back Tommy

tommy

21-12-2007, 05:14 PM

...and ADA has diversified products each with immense potential in its own aviation support sub-category.

Nice to see you back Tommy

Hi michael,

Yeah, esp. the voice recognition technology looks promising.

Another thing worth adding is the extension of the share buy back: it should support its stock price level somewhat, in addition to stabilizing/increasing earnings per share. With the top three shareholders expecting to have more than 70% of all issued stock as a result, there aren't gonna be many left on the market, meaning it would be a good measure against becoming a potential cheap takeover target.

I am sure ADA is looking cheap considering its clientele list and product offerings from the point of view of those wishing to enter this market, but if someone does want to snap up ADA, it won't be easy to get substantial holdings cheaply due to its stocks being so tightly held :-)