https://cdn-api.markitdigital.com/ap...df02a206a39ff4
https://cdn-api.markitdigital.com/ap...df02a206a39ff4
Oh dear,the market was expecting more.?
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https://cdn-api.markitdigital.com/ap...df02a206a39ff4
https://cdn-api.markitdigital.com/ap...df02a206a39ff4
Oh dear,the market was expecting more.?
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Hammered down 12.5% this morning, so clearly the market was expecting more.....
However, with NPAT for 6 months at $6.2m, earnings approx 6cps for the 6 months. Keep that momentum, earnings 12cps for the FY, then PE becomes about 5.5. :mellow:
I thought it was a great result.
Current assets 5 times current liabilities.
Stock level up with out borrowing is a big positive.
Strong out look too.
I'm confused about the price action. I can't explain the big drop at all.
They are guiding $82m revenue for FY23, implying $33.5m for H2, which is lower than the $48.5m H1 revenue. I guess some people think the company just had their best period?
Though the guidance can quickly upgrade if they get a new contract. Just the nature of their contract based business and lumpy income.
Personally I think XTE is in the right business for the foreseeable future and Poland is the right place to expand. The contracts will come sooner or later.
Possibly trading sideways above 50c until further business development.
Attachment 14491
2 or 3 decades ago I worked for a company that provided services to armed forces. One thing I remember is that it took ages to finally get a purchase order approved. They will come as I can't see how countries like ours that have provided ballistic armour to the Ukraine cannot replace their diminished stock pile. It will take just time.
Interesting how they can ramp up their business so quick. FY22 turnover was $28.3m and they did 50% more than that in the first half of 2023.
$82m forecasted revenue for the year, and still almost 3x FY22.
However they have diminished their cash pile from $36.2m down to $7m.........
From Stockhead this morning;
“The Defence Strategic Review is the biggest Australia has seen since World War II and while it is still early days I think there certainly will be opportunities for Australian companies,” Wulff said.
“We’ve got a lot of innovative companies listed on the ASX working in the defence sector from Droneshield to XTEK positioned to work with the Federal Government and ADF to improve the country’s defence capabilities for the future.”
We are in the right company,in the right sector at the right time.
[3 rights, so looks alright.]
Regal really depressing our share price with their incessant selling. They still have 8m shares and they basically sell 1m/month. I was really hoping that we could have found a willing buyer for their parcel instead of depressing the share price with on-market sales.
I expect several big contracts from the ADF coming in for Xtek in the near future. Also hoping that our polish sales office can soon celebrate a big contract win. Our collaboration with TATA might no bear fruit in the short-term me thinks. The wheels of army procurement are slow.
Market cap of approx 43m with revenues of 48.5m last year. There is big upside potential.
I share your sentiment on Regal.
FY23 forecast sales c $84m, EBITDA $13m and NPAT $9.2m, $11.7m net cash - EV/EBITDA <3 for a company that now has excellent management and good business prospects.
XTEK (ASX:XTE) is a Defence industry company operating as two distinct divisions – ballistics and technology. The ballistics division is based on its “HighCom Armor” brand and is focused on designing, manufacturing and supplying global military, law enforcement and first responder customers with personal protection ballistic products.
XTE’s cutting edge military tech division supplies UAV and UGV solutions, detection and optical payloads, 3D mapping and modelling software along with tactical situation awareness software.
XTE counts the the Australian Defence Force among its customers.
Wulff said it’s another company that could be in line to benefit from the Defence Strategic Review.
“The review places XTE in the prime position to work with the ADF to achieve the key point in the review of lifting capacity to introduce disruptive new tech into ADF capability, in close partnership with Australian industry, given XTE’s existing infrastructure and operational capacity,” she said.
She said the H1 FY23 for XTE delivered very strong results compared to the prior-corresponding-period (PCP). Revenue exceeded Bell Potter guidance at $48.5m, up 321% on PCP.
“The company has also recently experienced gross margin improvement, up 27.1% on the PCP, as revenue in the first half was largely driven by higher margin sales in the ballistics division,” she said.
“Given XTEK’s existing contract with the ADF for $26.9m to supply an unspecified amount of Small Unmanned Aerial Systems (SUAS), the strategic review now opens further doors for contracts to be extended and new orders to be placed.”
As of 31 December 2022, the Group held cash of $6.9m. The cash balance at the beginning of the
reporting period was $36.2m after receiving an advance receipt for an international order delivered
during H1 FY23. Cash payments during the reporting period were primarily used to deliver on the
major orders on hand and to increase inventory stock. Inventory stock was replenished during the
reporting period, with an increase from $16.4m (FY22) to $25.4m, in readiness for the large orders
currently under customer evaluation.
So $6.9 mil cash and stock $25.4 mil at 31st December.
The Group currently expects revenue to exceed $82m for FY23.
NTA at 31st December 2022 was 39.3 cents per share.
I added to my holding today at 38 cents per share.
Have Regal stopped selling??
Nice little bounce back in the last week.
Regal ceased to be a substantial holder last week - https://cdn-api.markitdigital.com/ap...df02a206a39ff4
It does seem that way Percy. Given the FY23 forecast, net earnings should be around 6cps, so PE less than 7. Company has a good pipeline of work, and talk about the tailwinds in the sector.
As Silu points out, Regal still have 4m more shares and presumably will divest these, but see that they've sold more than 4m in the last 3 months but also have been buying and selling along the way.
https://simplywall.st/stocks/au/capi...ares/ownership
Might be like 2CC, selling volumes ease and then it takes off......maybe.
Has anyone done any work on the pipeline of potential orders vs future sales?
Just notice it seems to have steadily increased from $100m to $200m based on company announcements. IKE used to disclose closed contracts and you could work out what future revenue was based on the historical numbers. Wonder if possible to do here?
Not a holder but looks like a good opportunity here with the big shareholder
Selling down . Once that stops and new big contracts are announced it could double in price quite quickly.
I’ve never invested in a company that has lumpy sales so am a little nervous but did a quick search and the military helmet market alone is worth US$2 billion a year so surely plenty of recurring revenue to be had
What happens if the Russian war end soon?
There is more to XTE than just supplying product to Ukraine military,although that was a very large contract..
BALLISTICS DIVISION (HIGHCOM)
Focused on designing, manufacturing, and supplying global
military, law enforcement, and first responder customers with
world-class, advanced personal protection ballistic products and
solutions for:
• Body Armour
• Ballistic Helmets
• Composite Structures
TECHNOLOGY DIVISION
Focused on manufacturing and supplying global Defence and
Security Agencies with world-leading Australian-made and
globally sourced:
• Systems – UAVs & UGVs solutions
• Sensors – Detection & Optical Payloads
• Software – 3D Mapping & Modelling SW
– Tactical Situational Awareness SW
• Support – System Integration, Training, & Service Support
This is about to rocket I reckon
The event is major fund selling down
The fundamentals is growing business trading at historic lows.
Could be a 2CC 100% in a few months type situation
Just my thoughts
If you track what they have reported as their leads/pipeline over the last few reporting periods it’s a steady increase.
Last investors presentation they said next year they expect further growth to current trend..
Imo it’s just a matter of time until the big seller is finished and this goes back towards to $1 mark
Looks like Regal has finished selling..? Not much on the sell side until 42.5 cents.
Something positive later in the month when FY is announced could send this back towards $1 mark
Hope you are right Rawz. Volumes have been at low levels since the start of the month. Still trading not that far off 12 month lows (34c), and well below highs.
Know there has been selling pressure from Regal, but still surprised trading at these levels, especially given their sales pipelines and forecasts. They do have 'lumpy' revenue but are trading at attractive multiples. As Percy has said, almost feel like there is something we don't know......
Could be a phycological thing. Like when a SP gets beaten down so much you stop buying. When previously you were happier buying at higher levels. Lucky for me ive only started buying so am really positive and happy with this stock
One big sales order announcement will change the momentum in the SP i believe.
Agree, especially as a small cap.
2CC went from sub-30c to over 60c in 3 weeks (albeit with a positive update in there). So something similar could happen.....XTE trading on good metrics.
XTE FY ended on 30th of June, so just awaiting their results - should have their preliminary report out roughly end of the month. EBITDA recently signaled at $9-10.5m AUD, so shouldn't stray from this.
Xtek had the stink above its head for many years that it's only an importer relying on orders from their customers which was also at a very narrow margin. We only really made money with spare parts and after sales servicing. This has changed quite a bit with the Highcom acquisition. Also being very illiquid and of course Regal made us an unloved stock for many years trading at super low PE multiples.
I traded a few times since 2016 doing relatively well but I believe that we will see a little re-rate in the coming months. Wouldn't hurt to announce additional large orders in the meantime.
Last trade of the day took it over $0.40. 15,000 shares do not a lot but a step in the right direction
Looking at the volume traded since the last Regal SSH notice i guestimate that they have around 2.5m shares still to sell. This is assuming they are exiting their position entirely. So at todays SP of 41 cents that's $1.025m to be sold still.
Perhaps SP stays depressed until then or until full year results are released with positive outlook?
I thought I won't buy more until I'm certain Regal has sold their remaining shares but 37c was just too juicy to turn down. Now hoping for an even small upgrade.
Expecting preliminary FY results should be through by the end of next week.
Hopefully it should be a catalyst so something..
Been very, very patient with this one. Hopefully reaching a nadir. I’ve begun buying a few (but not a barrowful). Please note, hope is not a strategy.
Can’t believe the SP action… looking forward to tomorrow and some good commentary about the pipeline
Will be interesting today what they are going to report. I obviously am in the camp that says that this is way undervalued at the moment and should move on good results and positive outlook.
May not be today, unless comes through during trading hours.
Just announced https://cdn-api.markitdigital.com/ap...df02a206a39ff4
Looks good!
Potential M&A activity and outlook for revenue and profit to continue to grow.
I may have expect more,however a very solid result.
Equity ratio now a very positive 55.3%.
Inventories up $9mil to $25.736 mil means they can deliver orders very quickly.As logistics get back to more normal inventory will reduce.
EPS of 6 cents means they are currently trading on a very modesr PE of just 6.17...Seems a bit too modest to me,considering the sector they are in.
since this post 2 weeks ago 1.24m of shares have traded... Regal got to be only a week or so away from a total exit (if thats what they are doing).
With todays outlook of continued revenue and profit growth surely we can get into a uptrend.. like Percy says this is very cheap
Unfortunately in an out of meetings today but they also gave an investor update https://www.directbroking.co.nz/Dire...spx?id=6461750 in which they say the total amount of opportunities in the pipepline is now $375m ($75m technology and $300m ballistics). Even if we can only get a small(ish) piece of this then the future should look bright.
Way too cheap for what it is but I've been saying this for years.
FY 23 RESULT HIGHLIGHTS
Continued to execute on our Strategic Plan (reinforce success, seek adjacencies, and create our future)
Invested in our team to position ourselves to deliver into global markets
Grew pipeline of opportunities to +$375m, with multiple opportunities on foot for delivery in FY24 and beyond
Leveraged attractive sector fundamentals that continue to underpin future growth
Seeking inorganic opportunities to drive penetration into US, UK, EU markets
Decided that it is the market that is wrong so got myself another parcel at 37c early this week and late yesterday more at 33.5c. I might not keep that many shares for too long but me thinks it will be a great short-term play. The numbers don't lie and there will be enough investor waking up this morning, reading up on the fundamentals and decide to invest in XTE. Let's hope I'm right.
I've been nibbling away for a while.
What ido they say about buying in a downtrend......?;)
Have the large seller qutting their holding and fundamentals underpin the purchases.
But as another poster here said, it is almost like somebody knows something that we don't.....
Closed at 32c, a 52 week low.
I'm shocked. But then should have known... what do they say- never buy in a downtrend......
How low can it go.....
Market cap less than $28m
I believe Regal might be gone soon. I will know the moment I don't see a big sell dump towards the end of day.
An updated research report by MST has a target price of 73c. https://www.xtek.net/2023/09/21/mst-...xte-20-sep-23/
Key highlights:
• A$3.2m order for specialist ballistic armour products
• Second large order received this financial year
• Order allows for the further reduction in inventory to normalised levels
• New international military customer
Friday 29 September 2023. XTEK Limited (ASX: XTE, ‘XTEK’, ‘Group’) is pleased to announce that the Group’s Ballistics Division (Highcom Armor) has received a new purchase order valued at A$3.2m to supplyhigh-end ballistic body armour products to an undisclosed international military customer.Scott Basham, XTEK Group CEO, said,“Our Ballistics Division received the order on the back of its reputation for advanced manufacturing, sales and distribution capabilities across North America, Australia, and Europe. Through our Ohio and Adelaide facilitieswe design, manufacture, and supply world-leading, ultra-lightweight and high-performance ballistic armour products and solutions to military, law enforcement, and first responder customers worldwide.
This new international order, from an undisclosed military customer, worth A$3.2m, will see thousands of our advanced high-performance body armour products manufactured and shipped overseas over the coming weeksto meet this customer’s operational requirements. This order, in addition to the recently announced $2.6m order,will assist in the reduction in the inventory levels reported at the FY23 full year result.”
Good start to the day
https://stocknessmonster.com/announc....asx-3A627453/
XTEK Secures New Multi-Year SUAS Support Contract with Department of Defence of up to $110m Over 10 Years
Yes excellent. SP up 10%
Potentially Regal finished selling (surely!!!) so this can get to fair value which is closer to $1 imo. All it will take is a new uptrend supported by new contract win announcements which hopefully isnt out of the equation considering they said they have a $300m pipeline was it!?
Excellent contract win.
Just when it looked certain we had XTE wrong,it turns out we have it right...lol
XTEK has been running strongly since the last big contract win. Im now back in the green yay.
MST Access new report out: https://www.xtek.net/wp-content/uplo...-04-Oct-23.pdf
Wins add credibility to pipeline
NEED TO KNOW
− XTEK has announced that it has been awarded a 10-year $110m support contract for the small unmanned aerial systems (SUAS) it has just finished delivering to Australian Defence.
− It has also announced some small ballistics orders for international customers– important reference sites.
− These contract awards increase credibility associated with XTEK’s $375m pipeline.
XTEK has announced that it has been awarded the services and spare parts contract for the $27m SUAS order announced in Dec-22. An initial 4-year contract with 3, 2-year extensions includes services and spares and totals ~$110m. We estimate that this contract will generate gross margins of ~30%.
XTEK’s US-based Highcom business (Ballistics division) has announced the completion of one ($2.6m), and award of another ($3.2m) small personnel protection contracts with unnamed international customers.
The $375m weighted pipeline is difficult to reference given the lack of historical pipeline conversion rates. These announcements build credibility around the efficacy of the pipeline
Valuation
Our forecasts and valuation remain unchanged from our previously published report in September. We estimate a 12-month forward value for XTEK based on capitalising FY25 EBITDA at a discounted market multiple. Our valuation is $0.73 per share with upside to forecasts and valuation will come as the Company proves up pipeline conversion. It is worth noting that cash at bank at 30 June 2023 ($7m) added to the estimated $10m of surplus inventory (that management expect could be released by 31 Dec 2023) approximately equals half the market cap. And adding this to the ~$20m of value from the SUAS support contract ($2m NPAT p.a capitalised at 10x) gives a value similar to the current market cap.
As someone said, if only the broker valuations always came true......
Yes true. and that is paid research so need to keep that in mind.
But none the less the current P/E is 6 and the main point the report was saying is their much talked about $300m+ pipeline has more credibility if you like.
At valuation of $0.73 is still going to be trading on low double digits P/E. Not an unfair valuation imo.
Someone on HC posted that apparently Regal sold their remaining shares and are totally gone now. Which might explain the little rise today so far.
name change
Highlights
• Proposed name change from XTEK Limited to HighCom Limited
• Shareholders to vote on name change at AGM on 23 November 23 Monday, 9 October 2023:
XTEK Limited (ASX: XTE, ‘XTEK’, ‘Group’) provides the following market update with respect to a proposed name change to HighCom Limited.Following the significant changes and growth of the business over the last two years, the Group now proposesto take the next step in the evolution of the business and will seek shareholder approval at the upcoming Annual General Meeting on 23 November 2023, to change the name from XTEK Limited to HighCom Limited andamend the Company Constitution accordingly. The Group expects the new ASX ticker code will be HCL.
The Board believe that this name change is an important and necessary step. It will better reflect the long-termvalue creation potential for shareholders now being generated by the Group’s “HighCom” ballistic armour brand, through its increasingly successful commercial business operations with Military, Law Enforcement Agencies, and Government customers, in the US and around the world.
Accordingly, the Board believes that by aligning the ASX listed parent company name with the US andInternational subsidiary names it best positions and unifies the Group for its next exciting stage of growth and global expansion.
The Group intends to retain the current two operating divisional structure, with the Technology Division being simply called “HighCom Technology” moving forward and focus its efforts on the sales and maintenance support services of Small Uncrewed Arial Systems (SUAS).
The Technology Division business continues to be an important revenue generating part of the Group’s overall operations, especially after having just signed a 10-year, potential $110m+ Support Contract with the Australian Department of Defence, and the Group will continue to maintain this small, dynamic, and highly capable team collocated with its corporate headquarters in Canberra, ACT.
Interesting proposition. Don't really see the point myself, unless to get away from 'history' and a rebrand and name change part of that. Certainly trying to divorce itself from its terrible long-term share performance.....
Many moons ago I worked for a company that had licensed a well known brand name for one of it's products which the German Army wanted. It took a long time to get the official purchase order because their system had us in it as 'brand name' and not the actual company I worked for meaning long delays. Long story short - never underestimate the stupidity of army procurement.
very good gains continuing... up 6% so far today. Ive said it before- a very good chance we get into a nice uptrend here supported by the usual Highcom contract announcements and it being highly likely that Regal have finished selling so nothing to hold the SP back.
Recent conflict in the middle east potentially adds further demand. I read Israel could be mobilising 100,000 troops!! Thats a lot of armored vests..
Another order and XTcave manufacturing to move to USA.Both positiev.
https://cdn-api.markitdigital.com/ap...df02a206a39ff4
https://cdn-api.markitdigital.com/ap...df02a206a39ff4
in the update they say they are negotiating multiple similar sized orders and some large ones which if comes in would wipe out their current inventory. At half year they had $25m and have sold about $5m ish so thats another $20m at least
all looking very good with market cap sitting on $40m
Sell side thinning out.. Regal gone and all the weak hands with them.
Each new order announcement is going to be more fuel for the fire under the SP. momentum is a wonderful thing
Looks as if it's ready to pop.
Pumping out the (price sensitive) announcements faster that Chris Castle and Chatham Rock....... :p
Although todays announcement is more of a recap of recent announcements rather than anything new? Or have I missed something? Regardless the market likes it - trading at $0.48c.....!! :t_up:
Just wishing had bought more at 27c!! :laugh:
Its trading so cheap with P/E of 6-7..
$6.9m cash in the bank, no debt and market cap is $44m.
Good move to remind the market where the company is at and where it is going:
"Based on current sales and business development activity being
progressed around the world, and the continued tailwinds for the sector,
the Group is positive about maintaining continued revenue growth and
profitability in FY24."
ive had so much success with micro caps of late, think i might just stick with them. I enjoy researching and investing in them as well
Another one!
How good!!
Back up over 50c.....:)
Not far off doubling in price in a month.
Agreed. Happy to see a large holding finally bounce back - and plenty of upside and limited risk on 5X fwd PE with $10m cash. Very well- managed by Scott Basham too.
Price has rebounded, presumably as Regal have finished selling - but surprised over recent times how it kept heading south, and to the levels it got to, despite the annual result and the positive developments. I was starting to second guess that there was something didn't know or had missed......
But would be interesting to know Regal's thought process around their holding and selling out. It must have been well signaled that they were selling down, and expect not that easy to sell a decent chunk of a reasonably small/illiquid company on market.
I'd be interested in where they are putting their funds out of XTE, and what is a more compelling investment when they were seemingly driving the price lower to get out.