It's a termination payment. Suspect weren't happy with the results.
It actually isn't a great earnings update. Revenue growth at mid-point of guidance is only +9% in the 2H23 vs +20% for both Jan and Feb 23. That suggests a material slowdown in the last 4 months.
I think unless the drone business becomes profitable in FY24 earnings will probably be flat or fall vs FY23 at this pace of rev deterioration and cost growth.
Biz made $22.3m of adj EBITDA on $94.4m rev in 1H19. Made $15.2m of adj EBITDA on $90.6m of rev in 2H19.
Now looks like will make around $8m adj EBITDA in the core business in 2H23 on $86.2m rev (assuming drone loss of $0.4m for FY and backing out the termination payment). That's barely up from the $7.6m (ex drone biz) EBITDA in 2H22 on $79.1m of revenue.
Stock is not expensive but it is clearly facing structural headwinds and looks to be entering a cyclical downturn.
GTN Price at posting:
45.0¢ Sentiment: Hold Disclosure: Not Held
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