Adacel released their managements Long Term Incetive Plan. This applies to the:

- CEO

- Vice President of Business Development & Strategy

- Vice President of Operations

The company has agreed to issue 406,000 performance rights that will vest after FY24 results are relased.

Management are required to achieved an annual return on invested capital (ROIC) of 26% or greater over 3 years (25% rights vesting).

Managerment are also required to achieve an annual growth rate in revenue of 10% or greater over the 3 years (75% rights vesting).

Adacel announced a 12 year extention to their subcontract with Leidos for FAA's ATOP program.

FAA - US Federal Aviation Administration

ATOP - Advanced Technologies & Oceanic Procedures

Leidos - A company founded in 1969 (as SAIC) providing technology, science and engineering solutions to the aviation and defence industry. Leidos is valued at $13B on the NYSE.

Adacel have been working with Leidos for 20 years in supporting the oceanic automation software for ATOP.

ATOPs system improves flight profiles, reduced fuel burn and carbon emissions as well as improves airspace capacity and efficiency through the following systems:

- Flight & radar data processing.

- Confilct detection between aircraft

- Satellite data link communication and surveillance

- Electronic flight strips

Although, this contract extention does not directly drive future growth in the company, it did historicaly account for approx 45-65% of the companies services revenue over the previous contract term.

Having this partnership continue with Leidos demonstrates Adacels technology relevence in the aviation industry.

Disc: I own

Current key metrics:

Market Cap: 96m

PE: 13x (FY2021)

Revenue: 40.1m (FY2021)

Earnings: 7.3m (FY2021)

ROE: 37.5%

Following up on the FY2021 results, my concern is the lack of both revenue growth and earnings growth guidance for next financial FY2022.

However, this sounds like it's related to increased spending in order to drive growth:

"Having solidified Adacel's operational, product, and financial foundation, this year we will invest in our sales capabilities to drive future growth. Moreover, we will continue to drive shareholder returns through our balanced capital management strategy, including dividends, share buybacks, and potential M&A activity."

I will continue to hold until I see any issues with this business statergy.

Adacel FY2021 Result Released

Key Highlights:
• Profit before tax more than triples from $2.2 million to $7.7 million;
• Cash more than doubles to $11.5 million on strong operational cash conversion;
• Total dividends for FY2021 increase of 140%
• Guidence For FY2022,  anticipates a profit before tax of between US$5.7 million and US$6.0 million as the company moves from reporting in AUD to USD.

There is a conference call today at 4pm for those interested:

https://s1.c-conf.com/diamondpass/10015667-d7fh6j.html

I have not fully been through the FY2021 report, I will update this post with my finiding.

However, revenue is $40m, profit is $7.3m and market cap is $78m which puts it at a PE OF 10 and P/S of 1.95

Adacel wins a new contract from the Seychelles Civil Aviation Authority (SCAA) valued at over USD$3.6 million.

The contract encompasses a complete replacement of the current Air Trafic Management system. 

It's great to see this company winning new contracts.

In addition, the company has been buying back shares. This has lead to Adacel’s market cap of 67m and PE of 10.  Revenue is 40m and earnings 6.4m (Dec 2020).