Ann: XTEK achieves major delivery milestone for Defence SUAS Orde, page-51

I think they started the half year with $7m, and only $5m worth of prepaid work uncompleted by end of the last half. I think they guide to around $35m of revenue for this half, so $30m of it had not been paid up front. Their gross margins are about 50%, and the operating costs about $15m, so it looks like they should scrape through.

Normally I would expect a company in this position to raise capital and avoid 6 months worth of market worry destroying the share price. The question is, why didn't XTE?

I think a few things (my optimistic views)

1. Maybe the main insto holding who's been selling has been hoping for a raise, and buy in cheaper. Managemnet might be at odds with this assessment and digging in their heels

2. Maybe management are looking to secure another major contract which includes a prepayment, which if they got, shortly after a capital raise, would look very bad, especially with all the dilution.

Either way, this half will look a lot more straight forward to investors, which is good because clearly they need a lot help with analysing these reports - the noise from inventory build (a good thing, as it was already contracted to be sold), and cash prepayments (another good thing, as it avoided a capital raise in 2022), has confused the hell out of them.

I've liked this management team since they took over a while back now. They're frugal spenders, steady operators, and I don't think they like to be "bullied" either.

We'll just have to wait and see.