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AUD55m
Research: TMT
Vection Technologies secured multiple contracts in February, generating total contract value (TCV) of A$5.8m, with management expecting to recognise the associated revenue and cash across H224. Year to date, the group has delivered more than A$22.5m in TCV, c 80% of FY23 TCV, underpinning growth momentum in FY24. The most substantial contract, valued at A$4.9m, was won with an existing customer in the defence sector, Vection’s second-largest vertical, showing that management is delivering on its upsell strategy. The other contracts spanned healthcare, retail and real estate, reflecting growing demand for extended/virtual reality technologies across a myriad of commercial applications.
Written by
Vection Technologies |
Contract wins underpin strong start to H224 |
Contract wins |
Software and comp services |
21 February 2024 |
Share price performance
Business description
Analysts
Vection Technologies is a research client of Edison Investment Research Limited |
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Vection Technologies secured multiple contracts in February, generating total contract value (TCV) of A$5.8m, with management expecting to recognise the associated revenue and cash across H224. Year to date, the group has delivered more than A$22.5m in TCV, c 80% of FY23 TCV, underpinning growth momentum in FY24. The most substantial contract, valued at A$4.9m, was won with an existing customer in the defence sector, Vection's second-largest vertical, showing that management is delivering on its upsell strategy. The other contracts spanned healthcare, retail and real estate, reflecting growing demand for extended/virtual reality technologies across a myriad of commercial applications.
Year end |
Revenue (A$m) |
Adj EBITDA* |
PBT** |
EPS** |
EV/sales |
P/sales |
Net cash*** |
06/21 |
3.5 |
(0.2) |
(2.5) |
(0.27) |
11.1 |
10.4 |
2.2 |
06/22 |
18.9 |
1.4 |
(7.0) |
(0.67) |
2.0 |
1.9 |
10.8 |
06/23 |
26.3 |
1.5 |
(11.2) |
(1.05) |
1.5 |
1.4 |
0.7 |
Note: *Adjusted EBITDA is normalised, excluding non-cash payments, exceptional items and interest revenue. FY22 figure re-stated. **PBT and EPS are normalised, excluding exceptional items and interest revenue. ***Includes debt, financial leases and term deposits.
On 12 February, Vection won a A$4.9m contract with an existing technology service customer focused on cybersecurity and infrastructure security solutions for national security use cases. Vection’s technology will be embedded in the customer’s supply chain, which management believes will lead to repeat business and further upsell opportunities. The group expects to collect all the cash relating to the contract before year-end.
Not only does this show management’s ability to deliver multi-million-dollar contracts with a single customer, but it also demonstrates successful execution of the group’s land and expand strategy. Kiosk Systems and Edge, the wins in retail and real estate respectively, are also repeat customers of Vection, providing further validation of its extended reality solution.
Below is a summary of the other contract wins:
Healthcare: A$350k (€211,990) three-year subscription deal with ITS Biomedicale Mirandola, an Italian biomedical education institution providing virtual/mixed reality software and services, focusing on software subscriptions. Management expects to report A$139k in revenue in H224 and A$210k over the next three fiscal years.
Retail: A$371k (€225,000) agreement with Kiosk Embedded Systems, a German embedded systems company, providing advanced AI-powered, 3D digital avatar kiosks for a hotel chain. Delivery will be by Q424, with potential for further work and prototype unveiling at the ITB Berlin Show in March 2024.
Real estate: A$250k contract with Edge Visionary Living, a Western Australian apartment developer, providing a virtual reality experience to showcase developments, with delivery by Q424.
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Research: Healthcare
FY23 was another strong year for Basilea, marked by successive guidance beats and meaningful progress in fortifying its product pipeline. Revenues of CHF157.6m were ahead of guidance, driven by c 23% y-o-y growth in Cresemba- and Zevtera-related revenues to CHF150.3m. Top-line growth, combined with operational prudence (despite investments in growing its portfolio), supported Basilea in achieving a second successive year of net profitability (CHF10.5m, c 2x the guided figure). FY24 will be an important period, with the FDA decision on Zevtera (April 2024) and launch of fosmanogepix Phase III trials. As we update our estimates to reflect the latest sales trend, the outlook for the commercial assets and pipeline potential, we increase our valuation to CHF968.0m or CHF80.7/share.