HCL HighCom Limited (Prev XTEK Ltd (XTE)

**percy** · 01-05-2023, 10:17 AM

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.]

**silu** · 01-05-2023, 02:25 PM

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.

**DarkHorse** · 01-05-2023, 08:17 PM

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.

**percy** · 02-05-2023, 09:23 PM

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.”

**Sideshow Bob** · 03-05-2023, 08:06 AM

Originally Posted by DarkHorse

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.

Makes the PE around 4.4 on yesterdays close.

Had been wondering what was depressing the shareprice.....

**percy** · 03-05-2023, 06:13 PM

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.