Forum Topics AVA AVA Q1 FY25 Trading update

Pinned straw:

Added 2 months ago

Overall, pretty good I think. Not that you'd guess it based on the markets reaction (but you cant read much into that when there have so far only been 6 orders valued at <$7k in total!! In fact, looking at the recent trading history, one may well speculate there was a bit of leakage and the market has already reacted -- shares are up ~40%-plus in recent weeks. hmmm)

Anyway, Ava is saying to expect 16-23% growth in the current half (they grew only 4% or so in the pcp), and to expect a much stronger second half. In recent years the 2nd half has typically been 10-12% better off than the first.

If that pattern holds, they'd be looking at 18% top line growth for the FY. Q1 Sales orders are a good amount above prior first quarters, and the third highest on record despite what is typically a slower period. So there does seem to be a good amount of traction.

I thought the growth in sales orders for the detect segment were especially pleasing, and it sounds like Aura-Ai-X is seeing a bit of traction. And Access had its strongest order intake since the initial stocking by distributors, which gives some sign that there's been a decent (and growing) uptake.

Importantly, they expect to be EBITDA positive in the current half, continuing on from the preceding half. Given many reiterations for a stable costs base, which has largely been borne out, I dont see any big risk for a further raise (barring an acquisition), and in fact we should *hopefully* start to see a bit of a jump in operating cash, which tipped positive in H2 FY2024.

I'll let people read the latest announcements, but it looks to me like Mal has done well to reposition the business over the past 18 months and laid the foundations for growth, which are really starting to emerge. They are building up a lot of reference sites and expanding their customer base, the business appears to have passed breakeven on a sustainable basis, and there is plenty of opportunity to be captured.

It's on 1.1x sales, which is a super crude metric but if you assume they can build a 10% or so net margin in the next few years, which seems very doable, AND continue to grow at double digit rates in terms of revenue, well, it doesn't seem too expensive at all.

Happy to maintain my holding.

Latest presentation here

lastever
Added 2 months ago

I watched the Ava AGM and they do present fairly well. Lots of pipelines and potential verticals but it looks like Mal is doing what he said he would to fill out the sales and perimeter security does seem to be a growth market.

Regarding investor sentiment, it's still grumpy after the communication gaffs from earlier in the year. There was a 30% vote against director share incentives (excluding Mal's which was only 10% against). And a shareholder used question time to grill the chairman about the communications. So that's good.

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