Ann: XTEK Half Yearly Report for 31 December 2016 and Appendix 4D, page-11

This is actually an encouraging report despite the first half being a $1.3m loss. It confirms recovery is well underway and we could finish FY17 close to breakeven or perhaps even a small profit. While the SP hopefully will firm as people read and digest this report, it confirms the big revenues will flow in FY18 from things that should start happening next month.

Key points include (some already noted above) that XTE predicts a profitable second half if forecasts are met(p 2) and that sales and orders in hand are $8.5m. Significantly $6.2m of those orders are with government agencies on 30 day terms (p 3) so should flow to bottom line in FY17 boosting cash and reducing inventory. If I recall right this is stronger than previously if we take out the first SUAS sale in FY15.

Also significant is confirmation that we should get the ministerial approval for the bigger SUAS order in April (p3). Even though sales will not start until FY18 the announcement effect should only be a month away. Again it reads to me as if the first outcome from the US DoD FCT testing is the Broad Agency Agreement now being negotiated for XTE to build and test new ballistic helmets (p 3). Such test agreements can lead to serious acquisitions down the track if successful.

It could be 2017 is when the rerating of XTE happens at last.