Product design and engineering company, Hydrix Limited’s (ASX: HYD) shares went up by 19.231 percent on 13 December 2018, following the release of the company’s trading update and 1H FY19 Outlook.
The first half of FY 2019 was very successful for the company as the company experienced growth in its revenue and was able to reduce its costs. The company also achieved continued success in its target markets of Medical Technology, Critical Systems & Defence, and Consumer and Industrial. The company’s core product and technology development services continued to deliver strong revenue growth, with sustained quarter-on-quarter increases since the start of CY 2018. Further, the company is expecting to meet or exceed all stated company milestones outlined for the first half of FY19.
The company is expecting the revenue in 1H FY19 to increase by at least 40% on 2H FY18 which means that 1H FY19 revenue would be broadly equivalent to the full year FY18 revenue of $5.7 million. In 1H FY19, the company increased the team by 25 percent to over 60 professional designers and engineer. During 1H FY19, the company secured four significant, potentially high-dollar value projects which include Rex Bionics, Calon Cardio, Gyder Surgical, and a smart water meter project. The company is expecting that it will achieve a 20% reduction in cash used in operating activities in the December quarter of 2018 against the September quarter of 2018. The company is also encouraged by the continued growth of its international business with 50 percent of its anticipated FY19 revenue expected to come from overseas customers.
The company has secured an additional $2 million of new and follow-on project work since its market update of 25 October 2018. This brings the potential total contract value of projects currently underway to over $22 million which represents an increase of 10% over the previous guidance that was provided in October 2018. As per Hydrix’s CEO Mr. Peter Lewis, the company is maintaining a strong focus on driving the business towards positive operating cash flow. The company has also completed the integration of Hydrix as well as the successful rebranding of the whole Group to ‘Hydrix’, with a new ASX listing code (“HYD”). The company raised $2.8m in August 2018 and completed restructuring and reduction of the Group’s loan facilities.
In the last six months, the share price of the company decreased by 50.94 percent as on 12 December 2018. HYD’s shares traded at 0.031 with a market capitalization of circa $17.4 million as on 13 November 2018.
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