@Pheadrus , I just watched the recording of the AVA interview. I agree that Mal presented pretty well and generated good enthusiasm. The target growth numbers also look pretty good if they can be achieved. It inspired me to do a bit more digging which has probably turned up more questions than answers.

• Pivot of commercial group to geographically focused sales force (across brands and platforms). I think that's a good story to be selling an integrated suite and also encouraging sales teams to solution sell rather than just selling point products. However looking at their web site, it doesn't present that way yet and is still very focused on Companies https://www.theavagroup.com/companies/ Hopefully its just the way they present themselves not keeping up with pace of the re-org.

• Platform Development - the Future Fibre Technologies "Aura" platform looks like its the logical point to develop the platform story from. Ideally, I'd like to see how with their sales growth targets they are not starting from $0 every year and there is some form of ARR they can tap. However, right now it looks predominantly like a box sale with a two year warranty. Its not clear to me yet where they generate the subscription revenue from as they build out things like AI/ML (which presumably would have a case for periodic upgrades as the models get better and better).
• It doesn't look like their customer service plans alone are going to be a great revenue generator https://www.fftsecurity.com/wp-content/uploads/FFT-Customer-Service-Plans.pdf.
• Also, the point Mal made about a lot of their customers wanting to keep these security systems air-gapped means its going to be harder to generate a scalable / remote service offer.
• Also looking at the BQT (Access) and GJD (Detect) its hard to see exactly how they would bolt into a "platform play" as they seem to be collections of edge appliances (locks, RFID scanners, Biometric readers, lights, motion sensors, cameras) with no clear unifying software layer that would integrate into an overall platform play. Their web sites provide indications that they are more about integrating into a platform developed and delivered by someone else.

• Looking at the Sales Order intake, its also not really apparent where the growth for the Access and Illuminate is going to come from.
• In fact their QonQ performance doesn't seem to be showing any growth.
• Access down 17% compared with previous year
• Detect looking to have a pretty steady 1.5m/qtr run rate since acquisition.
• There may be some opportunity to get some geographical expansion for Illuminate which (was pretty much all UK and a little bit of EU ... https://www.gjd.co.uk/distributors/ shows their distribution network ) could mean an eventual 2 to 3x sales for that segment taking it to about 12-18m per annum.
• If you bundle with the Access and Illuminate widgets into a "box of bits" model with some improved global distribution then I could see annualised revenue in 3 years from the two segments maybe getting to the 20 to 30m range. (very wet finger in the air).

• From my perspective, it looks like the majority of organic growth needs to come from Detect which does seem to be showing good signs ... according to the 25/7/2023 ASX trading update, full year order intake for Detect was 20.7m up 55% on FY22. However, if you normalise that pretty woeful Q3FY22 then the annual growth levels probably aren't nearly as much. As someone else pointed out, its a high CAGR that is required. For Access, I think its probably in the range of 40% to get to the low end 70m of estimates to 55% to get to the high end 100m (if my guesses about Detect and Access are close).

• Detect looks like they were probably underserved in terms of EU revenue in first half (deduced from 1H presentation indicating 97% growth in Europe coming from Illuminate which was 3m) which adds some support to Mal's hypothesis of improving the global sales force and I think some of the second half results have shown an uptick in EU bookings. Ideally, I'd like to see the Access sales broken out by region to get a better view on how their growth trajectory is going, not the blending that they offered in the first half. The big question for me is where they find the volume of customers (https://www.fftsecurity.com/about/client-list/) with the use cases and amount of infrastructure build out to justify this growth rate (eg. there are only so many pipelines, military bases etc. available). Is there some sort of clear tie back to US Inflation Reduction Act or other major spend that is forecast.

Next step - listen to the Annual meeting and have a deeper review of my valuation model.

DISC: Held IRL and in Strawman

Quick follow up research on the interview with Mal.

One thing that interested me very much was the name Rod Wilson, the new CTO and head of illuminate of AVA who is currently developing a new product platform base on the Aura Ai technologies.

Rod was the VP of products when he was working for Smith Detection. Mal was the president of that company for about 3 years during that period. Rod's last position was General Manager/CTO at Metrasens.

Basically, our new hire is not just a Phd in Physics. We are getting a well seasoned product manager who has rich experience in developing product linese that generate hundreds of millions of pounds in revenue.

Another fun factm, Rod and Jim, the VP Americas who joined AVA back in 2021 happened to work together at Smith Detection and Metrasens previously. Basically we are getting a whole bunch of new people but not necessarily a new team. Let's see how the chemistry works out in the next 12 months.

I think we are in good hands. Mal is clearly a CEO who understands the technology and has heaps of experience in execution.

My favourite part from this interview is when Mal pointed out why AVA has always been making lumpy sales. The company has to take every market equally serious to build up secured sources of income. Everybody knows AVA needs stronger sales capacity. In fact, the company has been trying since the Rob era without a clear strategy. All they've achieved was some hires in North America, which was okay since we got a couple wins in the energy sector after the arrival of James Viscard.

What Mal brought with him is a structured global gameplan and rich connection to critical hires. Instead of having a strong sales team in North America, we now have sales ececutives that cover the whole planet. Let's give this team another 12 months see how things play out. I think Mal is very confident about the $70M objective. In fact, this goal is only just a starting point for him. Maybe one day AVA will grow into the same size as Rapsican.

As a very commited shareholder, I'm keen to watch this growth story in the next 5 years.

Also, a big thank to Andrew for asking so many good questions.

haha, i 100% agree @Pheadrus I'm a sucker for a smooth talking CEO...

I do think that it takes time for a new leadership team to make their mark (just look at Catapult), and Mal's been there only 6 months -- a period where he turned over 65% of the workforce!

He seems to have the right focus, and glad to hear him say that this is largely about execution from here. The technology base is sound, and now it's a matter of converting prospects.

Was encouraged he batted back a couple of softball questions, and he really didn't seem eager to make ASX announcements unless legally required. I thought he was very restrained in terms of things like AI and industry tailwinds etc. And the response to the AuraIQ was very reasonable to me.

Also good to hear that acquisitions aren't part of the strategy and it seems like he's brought on some competent and well connected people.

All that being said, as I mentioned, we need top line growth in the order of 35%pa+ in the coming years. As Mal said, this is off a small base, but if that looks to be overly optimistic i'll definitely be re-thinking things. If it's on track, i suspect shares will re-rate rather significantly at some stage.