Adacel's dec half results have just been released. I said in my last post that a good result would be a first half NPAT >$1mill. The final NPAT number came in slightly above my prediction at $1.48mill on revenue of $25mill.
The company also booked a positive cash flow of $3.95mill.
The CEO made a cautious and subtle reference to a large FAA contract that is expected to be let in the next few months when he said "Adacel is well positioned for the anticipated increase in demand for [US] air traffic controller training requirements in the coming years." Obviously the company will only be able to speak of this large contract explicitly when, and if, it wins the contract (see the CEO's AGM notes for more details).
In my last post, I said that I expect the June half numbers to come in well above the Dec half numbers because of ongoing revenue streams and the large number of contracts won recently. Since Adacel's new chairman and CEO have assumed their positions, the company has been extremely cautious and conservative with its outlook statements (=a policy of 'under-promising and over-delivering'). Neverthless, the CEO seems to endorse my expectation of a larger June half profit since he expects "further improvements" in the June half.
Since I was pretty accurate in predicting the half year result (when many knockers on this thread were predicting a loss), I remain confident in my full year prediction of a $4-5mill NPAT.
This is an excellent result for Adacel, and given its still tiny market cap, we can expect a steady rise in its share price as we head towards the full year result. I maintain my expectation that, should Adacel book a full year NPAT in the region of $4-5mill, and should the company give a positive outlook for FY07, it will be trading close to $1.15 (=$100mill market cap)by November.
Watch out for a number of mid-sized and larger contracts in the coming months (see my old posts and CEO's AGM notes for more details).
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