XTE hit a new all time high yesterday, fair to say the wake up is underway. It's been well under valued for far too long.
Revenue growth has been reliable to date,
2016 $3.4m
2017 $9.0m
2018 $17.3m
2019 $37.9m
The USA acquisition added around $10m p.a, this new defense deal adds a further $5m p.a. I'm not sure they can match previous growth in % terms but it's looking like they will give it a good crack at least. The US acquisition was timely as they expect to step up their manufacturing capacity late year. Their propriety products needed a distribution line which they now have. Obviously the margin on manufactured products should be much higher than for re-seller products. In the latest company presentation they mention that the "XTclave TM manufacturing capability progressed with the facility expected to be completed by end CY19". This IMO will mark a step change.
Philippe Odouard, XTEK Managing Director, commented:
“Following the HighCom acquisition, XTEK is well placed to penetrate the lucrative US and Australian markets with its high value soldier solutions. We will have Australian and US manufacturing capabilities in the near term for our advanced XTclaveTM enabled products, providing a pathway to deliver large orders for our ballistic solutions and ability to target domestic sales and global exports. We can then leverage our existing customer base and networks to target large global sales of our full proprietary product line.”
The customer base since the Highcom acquisition has a fair few additions. This from their website
"Our North American customer base includes many federal, state, and local law enforcement agencies including the U.S. Department of Defense, Department of Homeland Security, Department of State along with U.S. Embassies and allied forces around the world. We also export our products throughout the world and currently distribute our products in Asia, Africa, Europe, Latin America and the Middle East"
With Just 48.7m SOI XTE has always been a thin trader but the direction now looks firmly set.
XTE Price at posting:
72.5¢ Sentiment: Buy Disclosure: Held
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