Thanks for your analysis which is good food for thought.
No doubt revenue is lumpy, and there are significant fixed costs and working capital requirements.
However, new management has significantly restructured the business since 2021, so I don't believe the historical numbers are relevant today. Steps to improve margins include:
- Rationalisation to focus on core body armour products offering superior quality technology at top end + complete range - Accompanying significant opex cost reductions - Transition to higher margin direct sales rather than whitelabelled products - Successful investment in marketing to acquire major customers in Europe - Excellent cashflows have provided the capacity to build up stock, so as to be able to deliver rapidly and at scale as the market demands
While 2H 2023 earnings were disappointing, the balance sheet remains resilient and order pipeline strong in a sadly unstable world. Unlike in 2021, the company is now well positioned to focus on efficient supply of a high margin, life-saving product with market leading quality, range and timeliness.
