The Victoria, Australia based Ava Risk Group Limited (ASX: AVA) provides risk management services and technologies to clients across commercial, industrial, military and government clients across the globe. Its product portfolio includes Future Fibre Technologies (FFT), BQT Solutions and AVA Global.
On March 12th, the company informed that it is evaluating corporate options for its International Valuables Logistics (IVL) subsidiary, Ava Global DMCC, after several secure logistics corporation(s) sent expressions of interest (EoIs) to consider a potential equity investment in that division.
While preliminary, any significant investment is understood to involve management equity for key staff. Since its launch in 2016, IVL business achieved record revenue growth of 159% on the prior corresponding period for the first half of FY2019. Besides, the market possesses significant growth opportunities with an addressable spend with its current major clients of over $ 63 million and an increasing pipeline of potential new clients with addressable spending of over $ 50 million.
Currently, the discussions are at a nascent stage, and the parties are yet to conclude due diligence to agree on key terms.
As a part of the process, Chris Fergus stepped down as Group CEO, and executive director of Ava Risk Group Limited, to transition to a role where his focus will be to primarily lead Ava’s International Valuables Logistics (IVL) Services Division.
The company has, in addition, announced the appointment of Scott Basham, as the new Chief Executive Officer with extensive experience in the security industry. On account of his proven sales and business development expertise, Scott will not only oversee the Group’s global strategy and operations but will also supervise their global technology sales & marketing teams.
On February 27th, Ava released financial results for the half year ended December 31st, 2018 (H1 FY2019), posting revenues from ordinary activities at $ 16.69 million, an improvement of 95% on $ 8.561 million recorded in the prior corresponding period (H1 FY2018). The services division revenue also rose to $ 8.473 million, up 159% on $ 3.27 million in H1 FY2018. The gross margins reduced from 65% to 41%.
Besides, the operating expenses excluding depreciation and amortisation amounted to $ 8.64 million, up on H1 FY2018 ($ 6.25 million) due to the full six-month P&L impact of the recently acquired MaxSec group and foreign exchange impact of a stronger USD on revenues amongst other drivers.
The net loss from ordinary activities amounted to $ 2.655 million, a decline on the profit of $ 114k recorded in H1 FY2018.
At the end of the period, the Group’s net cash and cash equivalents stood at $ 3.09 million on account of large cash outflows from operating ($ 535k), investing ($ 2.09 million), and financing ($ 141k) activities.
As of date, Ava Risk Group Limited has a market cap of AUD 29.49 million with ~ 210.62 million outstanding shares. The AVA stock last traded at a price of AUD 0.140, on March 11th, 2019.
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