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SciDev delivers inaugural net profit of A$0.4m
1HFY21 Financial Highlights
~(1HFY20 -A$0.2m)
~ Record half year results;
~ sales of A$18.3m (+300% vs 1HFY20 A$6.1m)
~ cash receipts from customers of A$15.8m (+290% vs 1HFY20 A$3.8m)
~ Net cash at the end of the period of A$7.1m
~ Strong gross profit margin of 23% (FY20 17%)
History
Scidev first appeared on my radar over 2 years ago when Harley Grosser from Capital H Management wrote about it and other competitors.
At the time Scidev was solely focused on separating solids from liquids. Since then, they’ve made a strategic acquisition in Highland Fluid Technology which allows the separation of liquid chemicals in water. Both of these verticals offer massive opportunities.
Recent Events
At first glance, the vast majority of investors likely dismiss this company completely under the assumption that it would be capital heavy and likely growing in lumpy chops when contracts are won. These things aren’t untrue, but what is missed is that a significant chunk (~70%) of their revenue is recurring. As an example, mines will need a continuous monthly supply of their OptiFlox technology to separate minerals from ore, a process which requires enormous amounts of water.
The events that unfolded in the past 6 months saw the stock fall from 0.95 to 0.45, losing nearly 60% of its value. Less look into what happened:
Why be bullish?
The same thesis of 2 years ago remains intact:
Widespread contamination of surface water and groundwater due to industrial releases of PFAS or use of PFAS-containing firefighting foams is now a major problem in the United States and globally. An estimated 200 million U.S. residents, nearly two-thirds of the U.S. population, receive municipally provided drinking water that is contaminated with PFAS
Quite staggering!
$350k per site (I think)..... $10bn TAM.... that's a lot of real estate to cover
But can they execute?