This comes as a bit of a surprise. According to the announcement, Managing Director Gerard Dyson has resigned. Now, we're left to read between the lines as to why—possibly, the board is implying that it's to save cash.

Dyson is a major shareholder and will remain on the board in a non-executive role. Perhaps I missed something (though I don’t believe I did), but for a CEO of a public company to resign without a clear explanation doesn’t seem sufficient to me.

Spectur's H1 results released after market close on 29 Feb had me worried but mostly good news here

• $650k debt paid down to $250k with confidence that the remaining balance can be retired before 31 Dec 2024 deadline
• Positive overall cashflow in Q2 (This included a $440k government R & D credit, which was mostly used to pay down the debt it seems)
• Changeover of old hardware offering to newly released products "did have some impact on product sales and associated services which we expect to be reversed in H2"
• A recent push for government tenders has been successful and should bear fruit throughout 2024 - "Prior to H1 FY24, Spectur generally didn't pursue public tenders or procurement panel opportunities, which limited growth potential in these markets. This half year we have focused on this area with a number of tenders responded to, with two won and a number more expected to be awarded in the next 6 months
• My concerns remain that despite strong gross margins of 55%, slightly increased employment expenses partially ate into the sales gains achieved. Cost control is critical for this business at the moment.

Overall it really does look like Spectur is turning the corner to profitability and finding new sources of sales and product fit that will sustain them into the future. Share price is up 11% since my last post at the end of Q1, but there is still much room for growth if they can put in a strong Q3

Spectur Limited (ASX: SP3) today announced that an agreement had been signed with Surf Life Saving NSW for the supply, installation, support and maintenance of Emergency Response Beacons (ERBs).

The contract's value is $1,196,205.54.with commencement on 1st December 2023 and runs for 6.5 yrs.

The agreement provides for:

• Purchase and installation of additional ERB units (20 new units anticipated in this Q2 FY24 with an additional 20 units expected in 2025).

• Support and maintenance (including subscription and helpdesk) of new units, for 60 months from installation date.

• Support and maintenance (including subscription and helpdesk) of existing units (32), for the balance of 60 months from the date of installation.

Pleased to see another contract signed with an existing customer. However,shareholders need evidence that the support and maintenance margins from this and future contracts are able to move us towards cash-flow positve territory.

Spectur's back with another mixed quarter.

The key detail that led to a 10% SP fall was a further $700k cash outflow leading to a closing cash balance of only $866k. Further, they have $650k of debt falling due on 31 Dec 2024, which will have to be repaid by cash or possibly a dilutionary placement.

But with the bad news out of the way, the green shoots continue to sprout:

• Spectur note that Q1 is always the worst quarter for cashflow due to annual and one-off payments (ERP systems, Insurance, Audit and Tax etc) and that the FY24 outflows are $130k less than Q1 FY23.
• Further, operating cash receipts of $600k were received one week after quarter close, and by 23 October, the cash balance is only $70k below the start of financial year balance.
• Q1 Revenue was a new record high for the company and every month of Q1 set a new sales record, with September sales of $940k being the largest month in company history. YoY Sales were up 36% for the quarter.

Overall it is my belief that SP3 represents good value at these depressed prices, as it has been deservedly sold down whilst it has been churning through cash but has now finally reached the point where it looks like it could be consistently cash flow positive from here. Further, a $400k R&D refund is expected in Q2, which in combination with the record sales quarter in Q1 has the potential to lead to a big positive cashflow quarter which may excite the market.

The key risk to this good value is the cash at bank position. If the current bank balance of around $1.45m were to suffer any significant unexpected outflows, a further highly dilutive capital raising would be required. However, Managing Director Gerard Dyson stated at Q4 that "Notwithstanding that Q1 brings an additional pay-run and one-off expenses, we are expecting FY24 to bring improved cash and earnings performance from prior years. Budget and forecast numbers suggest that we will not need to raise equity for working capital purposes with the current operating model.” We of course must always take with a grain of salt a leader promising that a capital raise won't be necessary, but so far Q1 has more or less followed his outline and I'm positive that a capital raise will not be necessary.

Realistically, Spectur is too small and illiquid -- even for us! But I do keep tabs on it.

26% revenue growth -- 18% organic

$5.3m in ARR as of the last quarter (60% of total revenue tends to be recurring)

Still loss making and only $1.5m of cash left. Still, they were only $6k in the red on an operating cash flow basis in the final quarter.

Big investments made in FY23 that are hoped to start bearing real fruit in FY24.

I reckon if Spectur was positioned as a start-up, and Gerard had more of a hipster look and ran the company out of a WeWork office in Sydney, they'd be raising capital at a $30m valuation.

On the ASX it trades for less than a Coogee townhouse.

strong growth (organic and by acquisition)

management suggesting no need for further cap raises which is good given the share price. Wonder if this might be ‘jawboning’ intended to induce a rise in SP at which point they can raise. That said, does seem to be close to cash flow neutral… at least on operating costs.

what are people’s thoughts on the need for further raises?

 Spectur Limited (ASX:SP3) Quarterly Activities Report

ASX Announcement | 31 July 2023

Highlights:

• Spectur Group revenue including entities acquired in Q3 (“Group”, including Spectur NZ and 3 Crowns Technologies) was $7.438m for FY23, up 31% on FY22 revenue of $5.828m.

• Recurring revenue for FY23 increased to $5.244m for the Group, up 57% on FY22 recurring revenue of $3.329m.

• Cash reserves at end of Q4 FY23 of $1.523m, with only $6k net cash used in operating activities for the Quarter.

• Strong sales performance in June 2023 ($641k), the highest month in FY23.

• Successful launch of STA-Power as an independent product and new product line.

• Profit focussed strategy set for FY24.

Join a live online briefing with MD Gerard Dyson on Tuesday 8th August at 1pm (AEST). Register here or request a recording.

Outdoor sensing, thinking and acting solutions and platforms company Spectur Limited (ASX: SP3) (“Spectur” or the “Company”) is pleased to report on its activities for the quarter ended 30 June 2023 (Q4 FY23 or the Quarter).

Full year revenue performance

FY23 full year financial results for Spectur Group now include part year contributions from 3 Crowns Technologies Pty Ltd (3CT, acquired in February 2023) and 100% share of Spectur New Zealand Limited (SNZ, acquisition of the final 49% occurring in March 2023). Group revenue was $7.438m.

Revenue for Spectur stand-alone (i.e. excluding 3CT or SNZ) was $6.900m, up 18% on FY22 revenue of $5.828m.

 Recurring revenue for Spectur stand-alone was $3.948m for FY23, up 18% on FY22 recurring revenue of $3.329m. FY23 delivered recurring revenue for the Group of $5.244m.

Spectur stand-alone FY23 Q4 recurring revenue ($1.016m) declined slightly from Q3, due to the cessation of some longer-term rental contracts (with associated data subscription plans) and some one-off subscription services in Q3.

A more detailed breakdown of revenue, expenses and earnings across entities will be provided in full year reporting.

Cashflow and Cash Balance

Notable elements of the Q4 FY23 cashflows for the Group were:

Cashflow from operating activities

$6k of net cash was used by the Group in the course of operations, with $12k attributable to Spectur and $25k used by Spectur NZ. 3CT generated $32k of net cash. Notable elements of operating cashflows include;

• $2.449m of receipts from all customers in the Quarter.

• Redundancy costs of $52k following rationalisations upon acquisition (not expected to be

repeated).

Cashflow from investing activities

• $18k of adjustment costs for the acquisition of 3CT increasing overall acquisition cost to $868k.

Cashflow from financing activities

• $500k of additional share capital was raised from a placement during the Quarter, of which

$450k was used to pay down debt owed to EGP Capital.

 Net cash usage across the Group was $95k for the quarter, the majority of which was related to investment activities. The Group cash balance at 30 June 2023 was $1.523m. The residual debt balance with EGP capital is $650k, repayable by 31 December 2024 in cash and/or by the issue of SP3 shares.

The chart below illustrates quarterly net cashflows over time.

Sales Performance

June was the highest sales month of the financial year with total sales of $642k. This was the third largest month of sales in the Company’s history and the largest ever June month. Sales comprised $536k of purchased equipment with significant portions from NSW ($243k) and SA ($213k). As of 21 July 2023, month to date sales had reached $462k, marking an excellent start to the new financial year. In addition to these sales, 3CT also successfully closed $282k of long-term contract renewals as of 21 July 2023 across multiple customers, including expansion of scope and price increases.

 Full year sales for Spectur and Spectur NZ totalled just over $4.7m, representing a 14% increase on the FY22 sales results.

The Quarterly results were solid, noting that the excellent June sales followed the more subdued months of April and May and an overall softer H2 compared with H1. The new momentum since June appears to have reversed this trend.

Sales Forecast

Opportunities in the near term are consistent with our published strategy.

We expect ongoing growth in South Australia following our investment in establishment last year. Take up in the local and state government space has been healthy and consistent with our focus around making communities safer.

We have several current opportunities of substance which incorporate the combined 3CT and Spectur entities. These opportunities bring together access to broader data sets than just cameras and include additional AI applications including coastal and ocean analytics, smart city applications, people counting, number plate solutions and more. The modular Spectur ecosystem is increasingly effective at managing workflows and external AI partners, enabling more comprehensive and broader solutions for customers.

Our push into the reseller space continues to build momentum with substantial opportunities in the sales pipeline for customers in the security and hire space. Spectur uniquely provides a fully integrated and proven solution for these customers to purchase and deploy. Reseller training and marketing collateral, and pending updates in the Spectur cloud applications and user interface, will provide additional assistance and functionality for these customers to manage and deploy their fleets independent of the Spectur support team.

Through the acquisition of 3CT, Spectur’s dominant position on Australian beaches has increased. Recent sales of our LARA (Lifeguard Activity Reporting Assistant) platform are complementing the deployment of our hardware and helping make our communities safer. Ongoing deployments of our beach hardware have continued and with the support of federal, state and local governments along with Surf Life Saving entities, additional deployments are expected in the future.

The recent launch of the Spectur STA-Power has been

successful, with system performance and customer

satisfaction exceeding expectations. In addition to powering

Spectur sensing, thinking and acting platforms, recent

“standalone” sales have commenced, and the associated

sales pipeline is building. Applications from third parties have

included powering of remote IoT sensors, LoRaWAN

gateways, noise monitoring, bespoke camera and AI devices

(non-Spectur), lighting and more. Customers in this space are also increasingly seeking to leverage the Australia and New Zealand – wide network of warehouses and field services technicians that Spectur has in place, to support installation, removal and ongoing maintenance of hardware.

 Rollout of core technology for our existing customers in the utilities space continues, with an increase in revenues from this space expected in Q1 FY24. Spectur also expects to add additional customers in the telecommunications space.

Spectur is pleased to announce that we are now an approved preferred supplier on the WALGA (Western Australian Local Government Association) “Information and Communication Technologies” Panel for the “CCTV, hardware, systems and networks” scope of services. This Preferred Supplier status for the local government sector carries an assurance of high quality, optimal value and full regulatory compliance demonstrated through a rigorous and independent tendering process. Participation in this panel provides a faster and easier way to support WA councils with our solutions.

It is noted that Spectur also has written approval for the Queensland, Northern Territory and Tasmanian Local Buy programs, subject to agreement on final terms.

Strategy scorecard

Spectur raised capital in July and August 2022 to fund the execution of our growth plan. Key milestones achieved included:

• Expansion of our reseller market, including supporting technology, training and marketing collateral.

• Establishment of our full-time South Australian presence, including the delivery of sales and revenue.

• Building out the marketing platform and increasing the depth of expertise in sales and marketing with a key recruit.

• Researching and visiting the USA to investigate market opportunities and build a market entry strategy (currently paused to allow focus on the current “profit” strategy).

• Substantially rebuilding the cloud infrastructure and DevOps environment, and designing a completely new hardware ecosystem (STA-Power, HD6, STA6s, STA6-240X and STA7) to support scaling, improve performance and modularity, reduce costs and improve margins.

• Acquiring 3CT and full ownership of Spectur NZ. 3CT delivered a technology stack, team and customer base that was complementary to Spectur, accelerating our progress in all these areas.

These initiatives, along with a series of debt reduction, productivity, cost control and operational improvements made throughout FY23 have positioned Spectur with a scalable platform for growth, improved margins and reduced overhead costs.

FY24+ Strategy

Spectur‘s strategy is firmly focused on achieving consistent profitability and cashflow self-sustainment. The investments in the foundations built in FY23 and years prior will be leveraged to demonstrate the long-term operational viability of the current Spectur ecosystem, prior to expanding into new markets, geographies or other strategic initiatives. Key themes for FY24, consistent with this approach, are:

 • Prioritise the reseller initiative, expanding the number of sales channels and increasing leverage of the existing business infrastructure.

• Drive integrated Spectur and 3CT solutions, to increase value to existing customers and customer sectors whilst broadening and deepening the technology moat from alternatives.

• Maintain focus on construction, government and utilities, in addition to resellers. Test at small scale our nascent mining and AI reseller customer groups.

• Integrate the technology stack (as appropriate) of Spectur and 3CT, with a focus on reliability, modularity, customer experience and cost-to-serve.

• Improve our user interface to support and delight larger customers and resellers in particular; and

• Drive a culture of operational excellence and productivity improvement to maintain and improve gross margins whilst constraining overhead growth.

Executive commentary

Spectur Managing Director, Gerard Dyson, said:

“After a year of substantial investment in our future, it is pleasing to return a net operating cash consumption of only $6k for Q4 FY23. We believe we are at turning point. An overhead budget smaller than the prior year, a substantial improvement in gross margins built off the back of improved technology and reduced 3rd party costs, and a growing order book underpin a very different FY24.

“Notwithstanding that Q1 brings an additional pay-run and one-off expenses, we are expecting FY24 to bring improved cash and earnings performance from prior years. Budget and forecast numbers suggest that we will not need to raise equity for working capital purposes with the current operating model.”

“The new technology that we have deployed in the latter half of FY23 and into Q1 FY24, combined with our upgraded cloud and pending UI improvements, are expected to support further improvements in customer retention, account growth and new customers.

“The always-iconic Spectur hardware has taken a large step forward on the back of careful industrial design to improve functionality, reduce cost to build and support, and substantially improve our physical brand presence.”

“The Board and Executive of Spectur are excited about delivering a strategy focussed on execution and incremental improvement to drive to profitability as a key milestone in our growth story.”

Investor Briefing

Managing Director Gerard Dyson will be holding a live and online investor briefing on Tuesday 8th August at 1pm (AEST), where he will discuss the quarterly, the Company’s progress and plans for the future.

Register for the briefing or request a recording here.

 Corporate Matters

During Q4 FY23 Spectur raised $0.5 million via the issue of 25 million fully paid ordinary shares to some its largest existing shareholders at 2c per share. The funds were primarily used to reduce the loan with EGP Capital as well as provide a working capital buffer. The loan was also restructured during the period with a repayment extension to 31 December 2024 and currently stands at a principal of $650,000.

Spectur Chair Darren Cooper agreed to take 100% of his Director fees in Spectur fully paid ordinary shares for the 6-month period from 1 April 2023 to 30 September 2023. The number of shares to be issued will be calculated at the volume-weighted average price for shares traded each month over the period, with shareholder approval for the issue of shares to be sought at the 2023 Annual General Meeting.

Disclosure under Listing Rule 4.7C.3 – Payments to Related Parties and their Associates During the Quarter

Salary Paid to Managing Director Non-Executive Director Fees Paid Superannuation Paid to Directors Total Payments to Related Parties

Ends.

$

72,000 36,167 13,046 121,213

This ASX release is authorised by the Board of Directors of Spectur Limited

For further information, please contact:

Spectur Limited

Gerard Dyson – Managing Director p: +61 (08) 9414 9059

e: [email protected]

Reach Markets

Sophie Bradley – IR Executive p: 1300 805 795

e: [email protected]

 To stay up to date on company news and announcements, register your details on the Spectur investor portal.

About Spectur Limited

Spectur Limited (ASX:SP3) is an Australian-based developer and manufacturer of security, surveillance, warning, environmental monitoring and AI solutions and platforms, powered by solar, IoT [Internet of Things], camera and cloud-based technology. The Company owns the rights to its innovative hardware and disruptive cloud-based systems which are deployed to provide solutions to industries including government and utilities, and the building, construction and civil sector. The Company fully owns the Three Crowns Technologies Limited and Spectur New Zealand Limited entities.

Spectur’s core products are solar-powered warning, deterrence, surveillance, environmental monitoring and AI systems and associated cloud-based platforms. These systems incorporate cameras, lighting, audible warnings and a hardware IoT platform, remotely accessed and connected via 3G/4G or satellite technology to a cloud-based platform. The cloud platforms include data ingestors and repositories, workflow managers, reporting tools and AI solutions.

 Spectur has nearly 40 employees across Australia and New Zealand, with offices in Brisbane, Sydney, Melbourne, Adelaide, Perth and Auckland. The company services more than 600 active customers with close to 3,000 camera systems currently deployed.

The Company design, codes, manufactures, sells, installs and maintains our hardware and software technology – providing a single point of contact able to configure to suit customer needs.

To learn more, please visit: www.spectur.com.au

Forward Looking Statements

This announcement contains forward-looking statements which are subject to elements of uncertainty, risk and other factors which could cause the actual results or outcomes to differ materially from those stated. These statements are based on an evaluation of current economic, contractual and operating conditions, as well as assumptions regarding future events. These events are, as at the date of this announcement, expected to take place, but there cannot be any guarantee that such events will occur as anticipated, when anticipated or at all given that many of the events are outside Spectur’s control.

Accordingly, neither Spectur nor any of its directors, officers, employees, contractors or agents, gives any assurance that the results, performance or achievements expressed or implied by the forward- looking statements contained in this announcement will occur as and when anticipated.

Beautiful day at North Head, Sydney today! Family have told me that it’s too geeky to be excited by this find.

Saw this on the North Head in sydney on the weekend - a bit hard to see but it’s SP3s so assume a local council or government customer - as in a national park.

Only a small buy but an on market but nevertheless

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 30/09/01 Amended 01/01/11

Name of entity Spectur Limited ABN 79 140 151 579

We (the entity) give ASX the following information under listing rule 3.19A.2 and as agent for the director for the purposes of section 205G of the Corporations Act.

Appendix 3Y Change of Director’s Interest Notice

 Appendix 3Y Change of Director’s Interest Notice

Rule 3.19A.2

  Name of Director Gerard John Dyson Date of last notice  24 January 2023

Part 1 - Change of director’s relevant interests in securities

Direct and Indirect

29 - 30 May 2023

Fully paid ordinary shares

400,000 Fully paid ordinary shares

-

Appendix 3Y Page 1

  In the case of a trust, this includes interests in the trust made available by the responsible entity of the trust

Note: In the case of a company, interests which come within paragraph (i) of the definition of “notifiable interest of a director” should be

disclosed in this part.

Direct or indirect interest

Date of change

Class

Number acquired Number disposed

+ See chapter 19 for defined terms. 01/01/2011

 Nature of indirect interest

 Note: Provide details of the circumstances giving rise to the relevant interest.

(including registered holder)

 Gerard John Dyson and Chantel Yvette Dyson ATF The Dyson Investments 2 Trust

Mr Dyson is a trustee and beneficiary of the Dyson Investments 2 Trust

  No. of securities held prior to change

  Indirect

3,002,461 Fully paid ordinary shares

1,377,777 Unquoted options (Ex $0.13, $0.066) 8,763,522 FY23 MD Performance Rights 6,000,000 FY23 MD Service Rights

Appendix 3Y

Change of Director’s Interest Notice

Value/Consideration $9,200.00 Note: If consideration is non-cash, provide details and estimated

valuation

  No. of securities held after change

 Indirect

3,402,461 Fully paid ordinary shares

1,377,777 Unquoted options (Ex $0.13, $0.066) 8,763,522 FY23 MD Performance Rights 6,000,000 FY23 MD Service Rights

  Example: on-market trade, off-market trade, exercise of options, issue of securities under dividend reinvestment plan, participation in buy- back

Nature of change

  On market purchase.

 Part 2 – Change of director’s interests in contracts

Note: In the case of a company, interests which come within paragraph (ii) of the definition of “notifiable interest of a director” should be disclosed in this part.

Detail of contract N/A Nature of interest

Name of registered holder (if issued securities)

Date of change

Interest acquired

Interest disposed

    No. and class of securities to which

  Note: Details are only required for a contract in relation to which the interest has changed

interest related prior to change

   Note: If consideration is non-cash, provide details and an estimated valuation

Interest after change Part 3 – +Closed period

Were the interests in the securities or contracts detailed No. above traded during a +closed period where prior written clearance was required?

If so, was prior written clearance provided to allow the trade

to proceed during this period?

If prior written clearance was provided, on what date was this provided?

+ See chapter 19 for defined terms. Appendix 3Y Page 2

Value/Consideration

        01/01/2011

With $1.2m of cash burned in the latest quarter, and only $1.6m in the bank (and $1.2m in debt, the majority of which is a loan from EGP capital which is repayable by the end of the year), a capital raise looks almost inevitable here unless management pulls a proverbial rabbit out of the hat. Disappointing.

Looks like a solid quarter for Spectur, with a record revenue result of $1.957m -- 37% higher than the previous 2nd quarter and 18% higher than the preceding 1st quarter.

A positive operating cash result helped nudge the cash balance $61k higher, although this was helped by a government grant.

Also good to see the weighted sales pipeline continue to climb.

You can read all the detail here, but all in all it seems the business is pretty much performing to expectations. (Not that you'd guess that based on the share price performance).

Shares are trading on a pro-rata Price to sales of about 0.76.

Disc. I own a small position.

It is not the best time - capital costs or balance sheet-wise - to make an acquisition. The spiel sounds alright (when does it ever not?), but I sure hope they have done their homework before pulling to the trigger.

Spectur to acquire 3 Crowns Technologies

When I saw the push notification from COMSEC of a price sensitive announcement for Spectur last night (post market close - Christmas long weekend) I must admit my heart sunk. After reading the announcement though I was pleasantly surprised.

On face value this seems like a good strategic fit. I'll be digesting this more over the long weekend. Disc: held.

Seems like it is worth a small bet in a diverisified portfolio under 3c. Growth is still robust, and with better cost control, the company can spit out FCF that justifies the current valuation.

Spectur provided an update today, revealing YTD revenue growth of 27%.

Seems to be executing pretty much in line with what Gerard was hoping for when we last spoke to him.

Pity the liquidity is so awful, but happy to hold a small parcel at current levels.

From the Coffee Microcaps Technology Conference

Day 2 (09/11/22) included presentations from SP3, ALC, SPZ, SYM, & AVA

Youtube link to SP3's presentation by Gerard Dyson

Spectur has delivered it's strongest 1st quarter to date, with revenue up 15% to $1.66m

The market didn't seem to care much for the results -- although I'm not sure how much you can read into a 6% drop when it's predicated on 10 trades totalling less than $10k. Welcome to the wild and wacky world of nanocaps!

That being said, we did see the unweighted sales pipeline drop from $10.27m on Sep13 to $10.1m on October 3, while the weighted sales pipeline dropped to $4.1m from $4.4m. Of course, that's up a lot from a year ago, and part of the decline would simply be the conversion of sales opportunities to actual sales.

It also wasn't a great quarter in terms of the cash outflow, although Spectur explains a good chunk of that as one-off in nature:

The company now as $2.8m in cash reserves and expects "far lower" cash consumption in the current quarter.

It's really way too small and illiquid to put too much emphasis on; it'll never be something any of us could easily take a meaningful position in.

It's just interesting that this business -- which has a market cap of $5.7m (excluding out of the money options), essentially the price of 4 bedroom house in Coogee! -- is on an annual revenue run rate of almost $7m, and has a recurring revenue run rate of $3.73m pa, with a fairly decent market opportunity and clear sales momentum. One that expects to be EBITDA positive in the medium term and has some favourable interim funding from EGP Capital.

Anyway, you can read the full update here.

disc. I have a 3% weighting here on SM and a less than 1% position in real life.

Finally caught up on the meeting! Thanks so much @Strawman for this updated interview. I get that this is a serious micro cap but I find Gerard quite’s case quite compelling.

Also appreciated the emphasis on low liquidity and care with orders although I’m hoping in the long term 10-20% here or there will get lost in the gains! Definitely going to keep watching. Held IRL

Jsmith feel your pain.

Fair to say I outlined to REACH that focus on the business and moving to CF positive and profitability might be of higher priority than burning shareholder funds ....

I don't hold SP3 but I noticed that they are holding a live interactive investor briefing on Friday, 29th July @ 1pm (AEST) for anyone who is interested

https://reachmarkets.com.au/spectur-live-investor-briefing/

Please join Spectur MD Gerard Dyson for an investor briefing

In the session, Gerard will discuss:

How Spectur’s wide technological moat leaves the company with no direct competition

The company’s weighted sales pipeline which has grown 93% year-on-year, as at June 2022

How the company is ready to scale and move into its next growth phase

It will be a fascinating look into how Spectur helps protect communities from floods, bushfires, tsunamis, shark attacks and vandalism – which claim more than 80 lives and cost Australia $18.2 billion annually

Hey guys

I saw @suttree thoughts on the cap raise but keen for others thoughts too… I purchased a tiny bundle of these shares a few months ago and now have the opportunity to buy in to the cap raise…

I guess given I wasn’t planning to invest more before I’m leaning towards steering clear. Even though the discount is significant in percentage terms with such a ‘penny dreadful’ and the recent slide in SP it may be a bit of a false economy…

any big bulls on Spectur out there?

SP3 issuing more shares to fund its next 6-24months (see blow)

Concerns re price being offered and the dilution .

Further concerns is the March Qrt 2022 they had $676,000 but burning $250- $300k per qrt.

This essentially provides 18months of operations if they do not move positive operating cashflows

I respect the revenue growth being achieved but concerned at ability to convert to positive cashflow and profitability.

It is at 5.1c trading at 1x sales

Confidential Term Sheet THIS DOCUMENT IS A SUMMARY OF THE PLACEMENT OFFER AND COMPANY DEAL ROADSHOW PRESENTATIONS STRICTLY PRIVATE AND CONFIDENTIAL OVERVIEW Type of Transaction Professional/Sophisticated Investor Placement of Fully Paid Ordinary Shares with one (1) attaching Bonus Option for every two (2) shares subscribed for (Placement). Bonus Options For every two (2) shares subscribed for under the Placement, one (1) free attaching Bonus Option will be issued with an Exercise Price of A$0.066 and an Expiry Date two (2) years from issue. Bonus Options Disclosure The Company will issue a Prospectus containing a separate offer of Bonus Options to each Placement investor, thereby providing disclosure in relation to the Bonus Options. Investors under the placement will be taken to have authorised the Lead Manager, Reach Corporate Pty Ltd, to complete and submit applications for Bonus Options as agent on their behalf. The Prospectus will be provided to all Investors once announced on the ASX, with the option to withdraw. Country Australia. Issuer Spectur Ltd (ASX:SP3) ACN 140 151 579 (“SP3”, “Spectur” or the “Company”). Placement Amount Up to A$1,650,000 (with the ability to take over subscriptions, subject to shareholder approval at an EGM). Issue Price A$0.036 Last Traded Price A$0.051 (on 14 July 2022) Discount to 5-day VWAP 31.1% Discount to 15-day VWAP 8.8% Discount to Last Traded Price 29.4% Shares to be Issued under Placement 45,833,333 shares based on a A$1.65mill raise. Minimum Bid A$20,000 Firm Bids Due 5pm, Friday 15th July 2022 Funding Due 3pm, Monday 18th July 2022 Shares and Bonus Options Issued Subject to Shareholder Approval – anticipated to occur in late August 2022 Shares on issue 106,305,280 shares Market capitalisation $5.422 million at $0.051 cents per share OFFER DETAILS Use of Proceeds The funds raised under this placement will be used for; - the Company’s expansion in South and regional Australia; - development of the Company’s globalised modular platform; - expanding the Company’s marketing program; - purchasing further inventory to mitigate supply chain risk; - preparing for the Company’s entry to the USA; and - costs of the Offers and the Placement. Restrictions Investors must be either: “(i) “sophisticated investor” as defined in section 708(8) of the Corporations Act 2001 (Cth) or (iii) “professional investor” as defined in section 708(11) of the Corporations Act 2001 (Cth). Disclaimer This Term Sheet is not a Private Placement Memorandum. It is for information purposes only and is not to be taken as a recommendation or advice to apply for shares. This Term Sheet is summary only information. Underwriting The Placement is not underwritten.

Had a listen to the investor presentation last night with Gerard. The key takeaways for me were:

• WA has been somewhat of a proof of concept given the constraints of lockdown there until recently. They’ve proven out to what they believe to be a scalable model but with room for improvement.
• Revenue run rate for WA is $2.4m. If they gain the same market penetration in the other states of Australia alone they’ll be earning circa $25m.
• Current focuses include: expanding into other states, improving the scalability such that the products are more “plug and play”, engage more resellers, NZ market, testing the waters in USA.
• Expecting similar growth for the coming quarters
• The costs of Macro headwinds are slowly being passed onto customers. However they’re cognisant of raising prices too quickly for new customers so as not to scare them off after they’ve worked so hard to get them. Except some margin reduction in the short term but will normalise and even improve in the medium term.

Overall a positive, confident tone to the call. High level of confidence in their products and the uniqueness and superiority over other solutions.

Spectur had a solid quarter -- a record result for the three months to March 31, and the second highest quarterly revenue on record.

The business did $1.54m in revenue for the period, which takes year-to-date revenue to $4.4m, a 28% lift on the same period last year.

The quarter ended strongly too, with a record $663k in March, the second highest monthly result on record and 25% above last March.

Recurring revenues, which now represent 56% of the total, was a record $863k, giving a yearly run rate of $3.45m. This revenue has the best gross margins; 71%.

The business is still cash flow negative, but fast approaching breakeven. Operating CF were -$255k, a big improvement from the negative $1.9m in the previous quarter. Still, there's only $676k in cash in the bank, although they have an additional $1.1m available. I dare say another cap raise will be needed before too long. Especially with some added staff costs.

The business has a decent sales pipeline and shares current trade at around 1x annualised sales.

It's tiny, of course, and quite illiquid. But certainly moving in the right direction.

Spectur has reported its most successful second quarter on record with $1.42m in revenue -- a 45% gain from a year ago.

The quarter ended especially strongly, with a record $564k in revenue for December, nearly double what it achieved in Dec 2020.

For the calendar year, the business did $6.1m in revenue, a 44% lift on CY20, half of which was recurring in nature.

The business remains CF negative, although the latest quarter was one of the better periods on record with an operating outflow of $263k

The sales pipeline looks healthy, with a weighted value of over $2m, which bodes well for the current quarter.

You can find more detail here

The difficulty I had with this company was the appearance and construction of their products. It all had the feel of being knocked up in someone’s shed.

I know this was addressed in the presentation, but if you wheel out a product that resembles a stage prop from a low budget 1970’s Sci-Fi series, then you have an uphill struggle being taken seriously.

I couldn’t get past this.

Spectur has reported its strongest first quarter to date, with $1.44m in revenue booked for the three months to September 30.

That's a 37% increase from the previous corresponding quarter and the third highest on record. It's a decent result in light of the fact that two of its most important markets -- NSW and VIC -- were in lockdown for much of the quarter.

With over 40% of this booked in the final month, and a 36% increase in the sales pipeline since June (unweighted), the company seems hopeful of a strong second quarter.

Spectur said it had a record 343 units deployed at the end of the quarter -- up about 40% from a year ago (but largely flat since they last reported this number in late August).

The company was cash flow negative for the quarter -- with operating cashflow at -$680k. There are some timing effects at play (eg payroll, insurance premiums and listing fees are paid annually), and the company did lift inventory levels in anticipation of future sales, but even normalising for this the business is not profitable on a cash basis.

It has $900k in cash and an undrawn debt facility of $1.5m -- so i wouldn't be surprised to see a capital raise at some stage.

Also worth noting the issue of performance shares and options -- if fully exercised/vested it'll increase the share count by around 4%. The options exercise price is only 10c, which doesnt seem like too much of a stretch given the current price.

At the current price, and on a pro-rata basis, shares are on about 1.8x sales.

I have a very small position on Strawman and none IRL -- i'd like to see sustained cash-flow breakeven before taking any meaningful stake, but if the sales momentum continues they are certainly on the right track.

Automated lifeguard/shark alarm at Cottesloe beach in WA article in local papers. 3 other shires in WA with spectur units.

Quick glance at the 4C makes this looks quite good. Quarterly receipts are 37% of the annual. Net cash is a whole lot better place, and cash on hand is stable. 

This one is worthy of a deeper dive.

Had a quick glance at Spectur, a tiny little company (~$8m market cap) that develops remote sensing systems. They're pretty impressive, largely self sufficient units that can have high definition and thermal vision, and connected to smart cloud based software, storage and control. They're mainly used by utilities, and for Government and Construction sites. 

At the latest half, the company reported revenue of just over $2m and a loss of $1m.

Roughly half of revenue comes from renting out a fleet of units to customers, and the other half from associated SaaS products. In total they get a roughly 60% gross margin.

On a run-rate basis from January levels, which picked up from a covid induced slump, Spectur is looking at $3m in annual revenues. That'd bring it much closer to breakeven, assuming they can do it.

It seems that the key thing to watch is the growth in the rental fleet, as that feeds the SaaS business. Spectur now has 350 units in the field, having grown from 0 in 2017. But numbers here have been flat over all for the past year or so, supposedly due to covid. Really good to see a strong start to the second half, but i'm mindful that sales tend to be especially lumpy for small businesses. Too early to tell if there's genuine traction.

I also have no insights into the competitive nature of the industry. As an outsider, Spectur's tech looks pretty cool, but I have no idea what else is out there, and how it compares. I might be wrong, but it's hard to see what competitive advantage you could have in this space; i dont think any of the (hardware) tech is proprietary.

I also dont know what the SaaS offering is like, but there'd be a lot of intense competition here in terms of image processing applications. That being said, the system is open to 3rd party integrations, and demand for things like AI, analytics, face recognition etc could be a good driver of unit sales.

The company has around $2m in net cash, which isnt a huge amount of wiggle room. They may need to raise again.

Shares are very thinly traded too, so will be very hard to build any reasonable position, and it'll be very volatile.

Anyway, it's something I might keep on a watch list. 

SP3 Signs Emergency Response Beacons Sales Contract

Highlights

~ Spectur signs largest single value Sales Contract to date.

~ Contract is for the design, manufacture, supply and services associated with Emergency Response Beacons for Surf Life Saving NSW.

~Spectur will earn upfront hardware and engineering revenue as well as ongoing service fee revenue for maintenance, data provision, cloud hosting and camera software access.