Elektron knocks it out the park
Elektron Technology is firing on all cylinders, with CEO John Wilson saying today that “the Board expects FY19 to be significantly ahead of market expectations,†after enjoying an “exceptional Q3â€. Thanks to “record sales†of £8.8m (+13% LY) at Bulgin (re unprecedented demand), alongside a similarly impressive performance from EET (Optometry equipment), posting revenues up +33% to £0.8m.Better still, due to management’s continued focus on product profitability, augmented by positive operational gearing and in-house capacity improvements, Bulgin’s FY19 EBIT margins are anticipated to be c.30% (vs 26.4% LY & 25% H1). Substantially ahead of our previous forecast of 27.6%, and delivering an estimated 34% for H2.
Elsewhere Checkit has also made excellent progress, reporting Q3 turnover up 200% to £300k (£100k LY) – and completing the development of its next generation Work Management module, which added Android compatibility and GPS tracking. Both key system enhancements for customers, particularly outside the food industry, as evidenced by the recent adoption by the Blood Sciences Department of Leeds Teaching Hospitals NHS Trust (50 locations).
So what does this all mean in terms of the numbers? Well in total, Q3’19 turnover came in at £9.9m (+16.5% vs £8.5m LY, & +17% YTD at £25.8m) with September net cash closing at an equally healthy £8.5m (vs £6.8m July). In turn, leading us to raise our FY19 revenue, EBIT and cash projections to £33.5m, £4.6m and £9.7m respectively vs £31.9m, £2.7m and £8.3m before. Indeed as an indication of the strong momentum behind the business, this is the fourth consecutive upgrade we have made in only 4.5 months.
Likewise our FY20 projections have been lifted too, thus boosting the overall SOTP valuation from 69p to 83p/share - split 62p Bulgin, 14p Checkit, 2p EET and 5p net funds.
John Wilson, CEO, will be presenting at our next Investor Forum on the 28th November. Register to attend: /o/equity-development-6102513651
Elektron Technology is a global business that designs, manufactures and markets products that connect, monitor and control. Co. has three business segments: Bulgin, which products are sealed connectors for the demanding environments, and custom product and system development; Instrumentation, Monitoring and Control, which key products are ophthalmic instruments, nanopositioning and sensing equipment, and materials testing equipment; and Checkit, which key products are cloud-based work management software based on interactive checklists, and smart wireless sensors for continuous automated monitoring.
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