SMN SP up 20% (off v.low base) after a positive update. CVM FAA approval still projected for end of 24 CY but the AEM business growing strongly. MC of $46M with forecast EBITDA of $3.4M and revenue of $28M before CVM sales and a 28% growth forecast for 2025. Confident of growth without further investment but hinting at much higher growth with further investment.

Structural Monitoring Systems forecasts maiden quarterly profit

Highlights:

Forecast FY2024 annual revenue of $28.38m, representing year on year growth of 27% building on revenue growth of 43% in FY2023.

Forecast FY2024 Group EBITDA of $3.38m v FY2023 Group LEBITDA of $0.27m Avionics with a figure of 28% revenue growth budgeted for in FY2025. 

Increased avionics sales expected to see the Group record a quarterly profit for the first time in the June quarter (before any audit adjustments).

Stronger than anticipated results bolstered by the strong performance of the Group’s Contract Manufacturing segment.

Forest Radio added as an approved Cooperator Agencies radio for USFS contracts for the States of Washington, Oregon, California, Colorado.

First Supplement Type Certificate (STC) for installation of the MTP136D on the AS350 helicopter type expected to be completed by the end of June 2024. CVMTM

Boeing confirms circulation of draft copy of proposed new service bulletin to the four largest US carriers.

Boeing undergoing evaluations of final testing completed in May, expected to be completed by the end of June.

Boeing expected to submit the final documentation for the proposed service bulletin to the FAA by Sep 30, 2024.

“We are confident we can grow the business profitably next year by as much as 20% (and by over 50% in five years) without further investment – and with conservative assumptions on CVMTM segment sales. “With further investment we believe we can generate significantly more growth (at least double the base case) over the five-year forecast period. "

Held in RL and SM

Not many of my holdings with good news but SMN actually made money this quarter ($766K) thanks to record sales from AEM.

FAA approval did not happen in April now likely June/July?

Highlights

March 2023 Appendix 4C and Quarterly Update

• Wholly owned subsidiary Anodyne Electronics Manufacturing Corp. (AEM) recorded an exceptional financial performance for the reporting period with gross revenue for the March quarter of $5.86million versus $5.36million the previous quarter up 9% and 35% higher than the March quarter the year prior

• AEM recorded the highest March sales figures in the Company’s history and is on track to achieve the highest annual sales in its history as a company

• Gross revenue for the year to date is $16.27million versus $11.05million in the year prior up 47%

• Forward orders for the June quarter are currently sitting at $4.81million indicating solid continued

growth in the months ahead

• Normalised EBITDA for the year to date is $2.67million versus $2.03million up 32% on the year to date prior

• AEM recorded positive operating cashflow for the quarter of $1.67million ($1.05million for the Group)

• AEM received approval from the Japanese Civil Aviation Bureau (JCAB) following the development of its Safety Management System (SMS) which formalizes the acceptance of the delivery and installation of repairs products into the Japanese market

A short test that will take 3-5 weeks is proposed to satisfy what should be the last of the concerns for Boeing’s certification team before submitting to the FAA for approval,” Mr Lynch-Staunton said. That test is currently scheduled to start at the beginning of May.

SMS expects to provide a further update on the expected timing of FAA approval following the completion of this short test period.

I know a bit about Structural Monitoring and the problems of breaking in to the aerospace market.

They have exactly the same issues I had at QHL. Huge barrier to entry, been at it for best part of 20 years, burns cash type business. Getting certified is a mega challenge, especially when your product is looking for defects, not something an aero company wants anyone to know about. Boeing has been spanked heavily by the FAA due to the 737Max, do you think they want anyone poking into their parts to report they were incorrectly made or they fail sooner than originally expected.

What a #@$tshow! Rick Deurloo (the only aerospace experienced board member) resigns after protesting the use of his name and signature by the board without his agreement.

He backs the EGM resolutions and slams the board in an open letter to shareholders copied to the ASX and Drake. Backs their board appointments.

Company goes in to a trading halt pending an announcement which is a purchase order from Delta (the airline that SMN have been working with all along) for 4 sensor sets with some undisclosed cash payment deemed not material. Touted as a milestone for the company and projecting Aft pressure bulkhead FAA approval in H1 23. Convenient pre EGM /AGM announcement to try and satisfy shareholders. This whole debacle has been one big sorry mess. I hope that Drake get over the line, clean house and the company can get some stability to make progress. More CR to come.

Disc: held in SM and RL both at a loss

SMS Group Update - Further Material Progress to Pivotal STC

Highlights:

 ~ SMS received the Statement of Conformity Certification from the FAA.

As part of the previously announced requirements to achieve STC approval, SMS has now received the Statement of Conformity Certification from the FAA after completing the CVM™ kit installation in Victorville, CA on a Delta B737-800 aircraft. This is a major milestone achieved on the well defined path toward the first STC approval. The next and final milestone is the submission of the combined laboratory test data from Sandia and Delta Engineering to the FAA. Although the FAA could request additional data from the laboratory reports, we are expecting these would have minimal impact to the overall certification timing.