Quickstep Reports $2.7 Million Profit on 24% Sales Growth

August 02 2019

Quickstep Holdings Limited, Australia’s leading independent manufacturer of advanced carbon fiber composite components, released a maiden full year net profit of $2.7 million for FY19 on total sales of $73.3 million, up 24% from $59.0 million in FY18. NPAT of $2.7 million represents a $5.6 million improvement on FY18 including a $4.4 million lift in EBITDA and $1.0m tax benefit reflecting future taxable income.

The company has also delivered its first full year of positive operating cash flow. Revenue from the group’s JSF contracts for FY19 was $53.0 million, up 37% from $38.6 million in FY18. JSF revenues are expected to further increase in FY20, albeit at a more modest rate, reaching full rate production over the next 6 to 9 months. C-130J wing flaps production continued at the long-term rate of two ship-sets per month.

FY19 gross margin of 22.3% (6.5% points improved on FY18) has been achieved through a combination of efficiency gains, process improvements, economies of scale and cost reductions, despite a challenging operating environment mid-way through the year as a consequence of the 3 month long repair to a key production item. The $7.1 million lift in gross margin has underpinned a $4.6m year on year increase in EBITDA to $5.8 million.
Quickstep has delivered $0.4 million operating cash flow for FY19, its first full year positive result, and at 30 June 2019 reported net debt of $0.3m, a reduction of $11.2 million from 31 December 2018. Operating cash flow improved year on year by $1.0 million despite a $3.1 million increase in working capital, principally inventory to support growth.

Quickstep’s FY20 revenue is currently forecast to grow between 8% and 10% with upside potential dependent on timing and scope of new business awards. Over FY20 the group expects to deliver EBITDA returns of between 8% and 10% of sales, positive NPAT as well as a material increase in operating cash flow. This is subject to the impact of AASB16, which is currently under review.

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