Advanced composites manufacturer Quickstep Holdings has announced $6.7 million net loss for FY2017, despite a 4 per cent increase in sales revenue and strong growth in JSF volumes.
Quickstep flagged lower volumes on wing flap assemblies for C-130J as offsetting its strong growth in Joint Strike Fighter volumes, which were 1,230 parts, an increase on 108 per cent on the 590 parts delivered in FY16.
C-130J shipset deliveries of 27.25 (26 shipsets and 5 spares) returned to normal program volumes after 35 ship-sets were delivered in FY16, as scheduled by Lockheed Martin.
Chief executive and managing director Mark Burgess said, despite himself and the new leadership team being impressed with the company's delivery and quality, the lack pf profitability must change.
"While we are pleased with our delivery and quality performance, we are not satisfied with the lack of profitability within the business," said Burgess.
"Higher volumes in future years will improve this, as will a number of cost reduction initiatives and expense reductions that we are putting in place to improve margins."
Burgess said the ramp up of the global JSF program will aid in securing more commercial contracts.
"With the JSF program ramping up and Quickstep's composites solutions beginning to secure commercial contracts, Quickstep is a much stronger company today," Burgess said.
"We have much work to do to grow further and become profitable, and this is why we have implemented the OneQuickstep change program."
The CEO also flagged the aerospace and defence markets as the company's biggest target for growing the business.
"The aerospace and defence sectors will take a much more prominent role in our growth activities, based on the size of the existing market, the attractive compound annual growth rates in these segments and their margin opportunities," he said.
"This concentration on aerospace and defence does not preclude us from seeking growth opportunities in other market segments – Micro-X and our front fender projects attest to this – however, aerospace and defence will be the main focus of our investment and growth initiatives in FY18."
Quickstep's operating cashflow was $0.1 million after investment of $5.5 million in R&D. Inventory decreased $1.3 million to close at $10.6 million at 30 June 2017.
Net cash decreased to $3.7 million after the $3.9 million capital equipment investment for future capacity, which was completed in FY17. The business also had a net financing cash outflow of $0.3 million in FY17, with repayments of principal and capitalised interest made against the $10 million long-term Efic loan and $1.5 million drawn down against a new Efic $3 million Export Contract Loan.
Income from grants including the Geelong Region Innovation and Investment Fund (GRIIF) was $0.5 million in FY17, in line with the previous year. The GRIIF grant will provide a total $1.76 million to June 2018.
As at 30 June 2017, the company had total cash and deposits of $4.4 million, of which $718,000 were in restricted term deposits. Net assets at 30 June 2017 were $8.0 million.