Pinned straw:
Aw Nuuu Bro, I have to update the model.
ACE announced it won a nationwide tender for mobile speed in NZ and alongside that it is raising up to $12m at $0.90 (tight). Not so good is a $3m sell down by the chair and MD.
The contract is estimated to be worth NZD92m (AUD83m) over 5yrs of which NZD5.2m (AUD4.7m) is recognised in FY25 with full deployment to be achieved in FY26 which is revenue of NZD17.2m (AUD15.6m). Margins unclear but noting their speed contract in NSW, it is typically lower at low 40s or high 30s.
Good win overall and dries a big step change in revenue and profit growth. I note ACE was the tech used to pilot mobile phone and given that is a big issue over the ditch, this is likely the first for further contracts for ACE in country. It will help as for ACE, it is a as easy as flicking a switch on the software to implement thus they have the advantage of lower cost and time to add on services.
See the valuation section for the impact of this contract on my valuation.
Yeh another contract in another Country. Clearly kicking goals and showing that their offering is one of the best available in the Aus market.
I'm not so concerned by the selldown by the Directors, as they will still hold around 30% ownership in the company, and they are trying to promote interest in the market. They also have performance rights, so will still have the ability to claw some of these back.