Pinned straw:
I just got off the AVA call.
Key takeaways:
Mal emphasized that FY24 was a transitional year, completing restructuring, launching new tech/products, and setting a firm foundation for FY25. It was a tale of two halves, with things accelerating in the final quarters.
Margin drop was due to a shift in segment mix -- Detect has the best margins, but strong growth in Access was why group margin eased back. Should normalise going forward.
Detect is really the core business, and Mal described this as a program or project based business, one that can have long lead times (3-12 months)
A $100 million pipeline, particularly strong in the Detect segment, is noteworthy. Mal repeatedly emphasised these leading indicators and you can see from the latest outlook table that they continue to expect high revenue growth against a relatively fixed costs base
At the mid point, you have ~62% revenue growth expected in FY25 and an EBITDA of ~$20m -- a 42% operating margin.
(interesting to hear Mal say "I know you've heard this before")
Aura AI-X has been transformational since its launch, contributing to improved detection and lower false alarms. The strong sales of over 100 units and Cobalt 2’s 48% growth in Access orders demonstrate successful product adoption and integration across segments
There was discussion about H1 traditionally being weaker than H2, with specific references to Q1 (northern summer) and Q3 (holiday season) slowdowns, aligns with their operational cycles.
Illuminate’s expected move to break-even or profitability in FY24
There was a noticeable shift toward emphasizing predictability in revenue, seen in their focus on bookings, pipeline, and backlog as core metrics.
Its a fractured and competitive market, and AVVA is trying to distinguish itself by focusing on the tech and aligning with bigger customers.
Company well funded, no expectations to raise capital. Board happy to commit to paying 30% of EBITDA as a dividend, which they think leaves ample room for growth investment.
Could FY25 finally be the year where things take off? Cost base and operating segments now set, good momentum in orders and sales.. Maybe. If they get anywhere near guidance you'd have to assume something of a rerate.
A do or die year for me.
fcmaster26
I listen the entire presentation this morning. Nothing surprising in my opinion. Mal did mention the involvement of Melbourne University in the Telstra deal, which was inline with my previous finding.
Mal gave a great presentation as always. He seemed to be very excited about finishing this transaction year. As a shareholder, it’s a bit annoying to see AVA went from being profitable and debt free to a capital raising, money losing but dividend distributing company.
The part that really pissed me off was Joyce explaining the dividend policy. All he said was the board talked to shareholders and believed the policy was fine. He should at least explain the reasoning behind making this policy, unless there’s none.
In my opinion this company has officially ran out of excuses. It’s time to deliver. 35M revenue with a solid EBITDA margin around 12% would be a great FY25 for me. I know it’s far below the projection but this is still fast growth.
Hackofalltrades
@Strawman so what do you think you are specifically looking for to indicate the kind of improvement we are hoping for?
Ie., what's a fail mark, what's a pass mark, what's a success mark?
NewbieHK
Thanks @Strawman for the call review. Good to see some expected numbers moving forward (I know we have heard this before). I am in the same camp next year, holders need to see some big step forwards. If they can meet those target numbers we may see this revisit the 20s again in 2025.
Hold in RL (down 45%).