Multiples so anywhere from $34m+ but this would be within existing market expectations. Note: They'll be very keen to hit $50m in revenue or cash receipts within a 12 month period. This will vest the 16m in shares to Peter, Jethro and Oleg (5,1,10m split). 16m shares is equal to 2.7% of shares on issue. Revenue 2020: 5.56m 2021: 10.70m 2022: 16.89m 2023: ?
Anything above $32m revenue will be a good outcome and show sustained year-on-year growth. Our gross margin is around 70% though I suspect this will drop in the short term while we invest in building up operational scale. So i'd expect a year end gross profit of $23m. Need to do some more homework to estimate where Operating expenses will be but expect these to go up across the board. Expect we will be able to post a modest profit in the $1-5m range.
As for general comments regarding Middle East contracts - these are very complicated but extremely lucrative. We work with a local partner although im unsure if local or if they're a locally based FOREIGN company. I'd assume the latter. Our wins with the US DOD will serve to solidify our value as a partner though im not sure how strong the AUS - Middle East relationship is.
Oleg is doing good work highlighting the FUD relating to Geopolitics. Things are tense and in many areas growing tenser. Add to that economic pressures that we can see, and assume will grow, and the chance for hostilities will increase. I think we've seen the most substantial growth in worldwide defense spending for sometime which is very positive for us. There is of course still value in civilian applications however, I don't think the threat in civilian circumstances has yet reached a level to justify the kind of spend that would materially impact our bottom line.
DRO Price at posting:
33.0¢ Sentiment: Buy Disclosure: Held
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