ASX:XTE - Xtek Ltd Research
HighCom Acquisition and Revenue Momentum
XTEK Ltd (XTE.ASX, XTEK) has entered into a binding agreement to acquire U.S. company HighCom, a provider of body armour and personal protective equipment. XTEK have also completed an oversubscribed A$2.7m placement and have announced a A$1.0m Share Purchase Plan (SPP). There are two key benefits of this acquisition that we look at in this update.
Watch our video research snapshot...
In addition to the HighCom acquisition, XTEK also released an investor presentation which provided revenue guidance for FY18/19 of between A$30m (contracted) revenue to a high case of A$35m (high case forecast) revenue6 (note, this is ex-HighCom acquisition).
This is an increase from previous forecasts in the October 2018 presentation for this same period which stood at A$20m (contracted) revenues to a high case of A$26m (high case forecast) revenue. In terms of contracted revenue, this represents a 50% increase within an 9-month period for the same FY18/19 period, which suggests strong revenue momentum during the period.