Ann: FY16 Results and Outlook-XTE.AX, page-2

Like WalrusBoots' earlier thread, I too have my fingers crossed. Announcements this week had negatives as well as positives but as far as I can see the negatives confirm bad news already released. If there are no surprises we might yet get that rebound for which we are all waiting.

Most of the slump in agency sales in FY16 was as bad as expected given FY15 had been boosted by the first $7m SUAS sale. Also XTE said in the Preliminary Final Report yesterday sales in the second half of FY16 were slower because of the prolonged federal election. Hopefully the $2m for the Long Range Weapon System slipping into July shows they are right and agency sales recover. Given the go-slow in the second half, that deal alone means agency sales for July already equal total agency sales for FY16.

Also on the positive side the Preliminary said they are negotiating for support services for the existing SUAS (from FY15) and a contract is expected in September. I think we knew this but have not yet seen numbers. It also confirmed Preferred Tenderer negotiations for more SUAS for Land 129 Phase4 are happening and are expected to be finalised in FY17. It suggests if a deal is signed this year revenues will not result until FY18 and beyond.

In the meantime the Preliminary said XTE ended FY16 with no debt (page 2) and $550,000 in cash and equivalents (page 6) and that another $750,000 was raised in August (page 3) so hopefully they have the working capital they need. Today's Full Year Results and Outlook said XTE is poised to deliver a significantly stronger result FY17. On what has been released this week that looks possible provided there are no nasty surprises.