The Data Exchange Signed $1.06 Mn Contract With Radlink To Supply DXN Modules

The Data Exchange Network Limited (ASX: DXN) is a company from the IT sector, and it designs, builds, owns and operates data centres. On 28 May 2019, the company announced the execution of a $1.06 million contract with Radlink Communications (Radlink) to engineer and manufacture prefabricated modules to be used as communications modules on a global mining company’s mine in Queensland.

Radlink is a Western Australia based company and a leader in providing wireless communications systems. Its offices are in the cities namely Perth, Adelaide, Brisbane, Moranbah and so forth. Radlink provides services to a wide range of industries such as mining, oil and gas, manufacturing, construction and government sectors.

The company has started work on the project and anticipates it to get finalized by January 2020. The Agreement depends on the standard termination provisions for a contract of this nature.

The contract inked between the company and Radlink demonstrates the demand for the DXN Module product of the company in the technology transformation, which is taking place in mine sites around Australia and worldwide. The company sees opportunities in the edge infrastructure market in Australia and the Asia Pacific zone. The company is hopeful that this business of the company would be generating revenue moving forward.

 

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Recently on 24 May 2019, the company announced the appointment of a new board member, Mr John Baillie, effective 23 May 2019, with more than twenty-five years of experience in financial services along with wealth management, corporate advisory, investor relations and private equity capital raisings.

Further, in the third quarter of FY2019, the company had used net cash of A$0.472 million in operating activities. The primary reason for cash outflow was in the form of payment made in the form of research and development, advertising and marketing, property leased assets, staff costs along with the administration and corporate costs.

The company made payment to acquire property, plant and equipment. Thus, the net cash outflow from the investing activities was A$3.275 million.The net cash inflow through the financing activities of the company was A$1.540 million. The primary source of cash inflow was from the issue of shares. By the end of the quarter, the company had net cash and cash equivalent of A$4.764 million.

The estimated cash outflow for the fourth quarter of FY2019 is around A$6.800 million, and the primary driver of cash outflow will be in the form of research and development, product manufacturing and operating costs, advertising and marketing, leased property, staff costs, administration and corporate costs as well as Data Centre construction.

The shares of DXN have generated a return of 1.85% in the previous five days. During the trading session, on 28 May 2019, the opening price of the stock was A$0.057. The highest price recorded for the day was A$0.058. The shares of The Data Exchange Network closed flat at A$0.055, with no further changes. The company holds a market capitalization of A$19.87 million and approximately 361.27 million outstanding shares.


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