STTCOMP XTE FA LONG
Industrials-Aerospace and Defense
MC $35.8m
SOI 52.7m
SP $0.68
CASH $5.5m
XTE sell and maintain UAV’s to the Australian military (ongoing $101m contract) as well as developing proprietary technology. XTclave being the main propriety technology produces lightweight and strong composite armor plates and helmets with recent moves towards production of space cargo's. The material is 30% lighter than standard armor and the helmet is marketed as the only helmet capable of stopping a bullet from an AK47. The XTclave manufacturing capability is being built out to handle larger scale orders and is expected to come online in the first few months of 2020 to supply the USA market. This is the first of several plants to be built, each one will generate around $20m in revenue. The first is near completion in Adelaide with the second planned to go to the US.
XTE have grown at around 100% every year
In 2016 $3.35m revenue
In 2017 $9.0m revenue
In 2018 $17.3m revenue
In 2019 $37.9m revenue
Being an Australian defense-based business, they have typically generated the bulk of their revenue from the Australian military. Recently they acquired a US based armor solutions company who generate $10m p.a in revenue at a GP of ~40%. Perhaps the most important part of this acquisition however is that they are buying an entry to the world’s largest military market. The acquisition target HighCom Armor Solutions have contracts in place with the US department of defense as well as hundreds of local level law enforcement agencies.
“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”
In summary this a company that has basically doubled revenue every year and predominantly done so while making a profit. The revenue has now grown to a point where material profits are likely to be seen. Also of note director Chris Fullerton has started buying on market. It's worth doing a quick search thru the PAR (also a director of PAR) announcements to get an idea of just how well and how large buys.
It's a relatively lightly traded stock so probably more suited to investment than trading.
Disc, I hold a bunch and have no intention in reducing any time in the near future
