SciDev (ASX:SDV) Cash Receipts Up +194% PCP in Latest Quarterly Activities Report

What does this mean?

There is a lot to unpack in this quarterly report as the company has been bustling this past quarter. Firstly, addressing the elephant in the room, we can observe that SciDev’s cash receipts from customers have jumped a mammoth +194% PCP, and revenues are also up compared to last quarter. The company has maintained a stable gross profit of ~23%, which is in line and on target with last quarters.

Overall, group revenue increased 25% in the December quarter following continued sales growth in the Oil sector of 21% and the recommencement of significant project activities in Construction. Revenue in Mining was down 30% due to the resupply cycle of major new projects, and revenue into Water was 63% up on the December quarter. The March quarter delivered positive net cash flow from operations of A$1.5m, which reflects both the solid gross profit margin of the business and the leverage of cash flow to growing revenue.

Primary working capital increased during the quarter, with trade receivables and trade payables broadly in line with the previous quarter. The end of period inventory position was A$3.3m. With positive cash flow and A$8.1m in net cash at the end of the quarter, SciDev may be well-positioned to continue executing its growth plans.

During the quarter, SciDev signed an agreement to acquire Haldon Industries Pty Ltd (Haldon), an Australian based environmental engineering and solutions company focused on the water treatment, remediation and persistent organic pollutant sectors. Haldon has created a strong presence providing innovative solutions in the PFAS market in Australia via their mobile treatment plants.

Haldon’s PFAS solution is world-class in removing PFAS to undetectable levels while reducing the waste volume by c.20,000 times, which is 100 times greater than existing commercial alternatives. The Company is encouraged by the recent regulatory focus on PFAS and is now well placed to execute on this emerging market in the Water segment.

SciDev is also currently in the process of a board rejuvenation with Mr Dan O’Toole joining the Board in early February 2021, as an independent, non-executive Director. Mr Trevor Jones, SciDev’s non-executive Chair, has resigned from the Board, effective 30 June 2021 or on earlier identification and appointment of a replacement Chair.