Quickstep Is Positive About Its Cash Flow To Increase This Financial Year

  • Oct 26, 2018 AEDT
  • Team Kalkine
Quickstep Is Positive About Its Cash Flow To Increase This Financial Year

Quickstep Holdings is expecting a positive cashflow for the 2019 financial year even though there was a cash outflow of $2 million in the first quarter as a result of delayed customer payments.

Quickstep (ASX: QHL), which prepares parts for the defense, aerospace and automotive manufacturing sectors forecasts that there will be a rise of 20% in the revenue this financial year 2019.They are even hopeful that there might be a positive increase in the earnings before interest and taxes (EBIT) and also positive operating cashflow. As a result of delayed receipts and increased sales, the company experienced a temporary increase in the working capital by $5.6 million. However, this increase in the working capital was balanced by the net deferred income made by the company worth $1.9 million. 

As compared to the June quarter, where the company made a net cash of $1.1 million from the operating activities, September quarter results of the income from operating activities was poor. There was an increase of 11% through the receipt from the customer which is equivalent to $15.6 million. The sales revenue also increased by 6% from the June quarter equivalent to $17.6 million.

As per the recent news update, there was an increase in Quickstep shares by 8%. Quickstep is generating some of its money from the controversial Joint Strike Fighter program. The company is going to manufacture and supply JSF composite components worth more than $1 billion. Last month, the entire JSF fleet in Australia got grounded as a result of  catastrophic crash in America. This has led to a reassessment of safety measures. However, this is not a matter of concern for Quickstep and they expect that there will be further an increase in JSF revenue by 40% in the financial year 2019. The company expects that as there will be an increase in the volume of JSF, there will also be an improvement in the gross margin of the company. The company also admits that due to the supply chain stress there was an impact seen in the Q1 of FY19 gross margin. Now the company has making a comprehensive supply chain management study to address the risks associated with the supply chain.

From the inception, the company has shown a negative performance of -51.01%. The one year, 5 years and 10 years performance of the company is -9.76%, -69.85% and -44.21% respectively. The total asset which the company holds is worth $ 32.19 million and total liabilities worth $26.404. This indicates that the company has potential to pay its long term obligations. The total current asset of the company is $18.933 million and total current liabilities of $18.194 million. This indicates that the company is able to clear its short term obligations as well. The total shareholders equity is worth $5.786 million.

The current market price of the share is A$0.079 (AEST 1:26 pm) with a market capitalization of A$41.65 million. As per the chart, the moving average convergence and divergence line (MACD line) is has cut the signal line from the below and is moving in the upward direction. It indicates that prices may go bullish.


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