Operational efficiency specialists, Orcoda Limited (ASX:ODA) integrates systems, process and data through connecting and automating complex supply chains via its 'Real Time Digital Platform, Management Expertise and Contracting Services'. The Company empowers its clients to 'Plan, Mobilise and Manage' complex supply chains, while minimising waste and maximising efficiencies.
ODA’s combined offering is focused on the below mentioned three key business segments and their client base-
- Healthcare Logistics- community, aged care, disability
- Transport Logistics- transport and logistics, manufacturers & distributors, field services
- Resource People Logistics- mining, oil & gas, infrastructure, business
In FY19, the Company witnessed an increase in its revenue, demonstrating its solid stance striving for logistics excellence in ODA’s business segments.
Let us browse through ODA’s performance in FY19:
ODA’s Milestones in FY19
On 26 September 2019, the Company released its Annual Report for the year ended 30 June 2019 (FY19).
In the report, Chairman Nicholas Johansen stated that ODA is currently is in a growth phase with sales forecasts for FY20 for all the three key business segments - Healthcare Logistics, Transport Logistics and Resource Logistics, looking very promising.
Listed below are few factors that would have possibly propelled this robust outlook for the Company:
- Segment revenue was up by approximately 70 per cent to $ 2.4 million in FY19 from $ 1.4 million in FY18.
- The 1st half loss of $ 750k turned around to the second half profit worth $ 633k.
- ODA successfully doubled its customer receipts in the final quarter of FY19.
- The Healthcare division performed very well with a profit for the year and was a major contributor to the FY19 transformation year.
- During the year, the Company commenced its Orcoda Connect business, which is part of Orcoda Healthcare Logistics. Under it, ODA began operations of selling licenses to operate vehicle rental businesses for the operation of transport for aged persons and persons with disabilities. The sale of licenses has contributed substantially to the profitability of the healthcare division.
- In April 2019, ODA completed a $ 1 million capital raising at 8 cents per share from the placement of $ 12,500,000 ordinary shares to Stephen Pronk and an associate.
- Moreover, Mr Pronk, now a board member, is helping ODA with his vast expertise and contributing to further growth.
- Post FY19, another capital raising of $ 1,050,000 was completed on 6 September 2019 at 16 cents per share from the placement of 6,562,500 ordinary shares. This raising was targeted towards working capital to continue to grow the business operations in all the three divisions.
- ODA owned net assets worth of $ 12,385,227 (as at 30 June 2019).
- Cash and cash equivalents at the end of the year amounted to $ 1,325,148.
ODA’s FY20 Outlook
The Company is well-positioned to advance its growth phase in FY20, with sales forecasts for all the three Australian divisions looking encouraging.
Besides focussing on the key divisions, in FY20, ODA will continue marketing the VIE structure in China to find the right buyer. Currently, the structure has been under option from two parties but neither of these deals progressed to a settlement, though the ODA Directors remain confident that they can sell the structure.
The Orcoda Connect business contributed substantially to the profitability of the healthcare division in FY19, its launch year, and is likely to do so in FY20 as well.
ODA will continue to look for ways to improve performance and cash flow, tapping specific areas where revenue is not impacted, in order to increase profitability.
The team has been building a solid position in the competitive but rewarding world of logistics excellence and has achieved the loyalty and support of its shareholders over the years.
Share Price Information
After the close of business on the ASX on 31 January 2020, the ODA stock quoted $0.200. The Company has a market cap of $21.71 million and its stock has generated returns of 8.11 per cent in the last six months and 21.21 per cent in the past one year.
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