HighCom receives $4.7m ballistic products order from military customer
Personal protection equipment specialist HighCom (ASX: HCL) has received a major boost to its fortunes with the receipt of a new $4.7 million order.
The contract to supply its high-end ballistic products to an unnamed military customer is a significant positive for HighCom after the recent reporting of a major loss in its latest half-yearly report.
Executive chair Mark Stevens said the inventory acquired in the purchase order is being prepared for delivery, allowing the sale to be completed in the current financial year.
“HighCom’s armour business continues to provide its superior products and expertise to the global marketplace, often within short timeframes, to meet the demands of militaries, law enforcement and first responder customers,” Mr Stevens said.
“This significant order, which is valued at $4.7m and is being supplied from existing inventory, is a testament to the dedication and hard work of our team who remain continually engaged with customers seeking to rapidly acquire large quantities of advanced high-end ballistic products to meet their needs.”
Weak half-year
In late February, HighCom reported that its revenue from continuing operations decreased by 69% to $14.9m for the half-year ended 31 December 2023, down from a record $48.5m in H1 FY23.
It also revealed that its gross profit margins decreased to 21.6% from 50.7% at H1 FY23.
The company told shareholders that the poor revenue performance in H1 FY24 was mainly due to its not securing several large international orders in the Middle East region.
Strategic initiatives
In response to the disappointing H1 FY24 financial result, the HighCom board implemented a number of strategic initiatives to improve the cost base and operational focus.
This included a tightening of inventory management, still a key priority with the aim of reducing its stock on hand to between $8m and $10m.
The company also recently closed its Adelaide manufacturing centre.
The Highcom Group is comprised of HighCom (Australia) and its two distinct businesses – HighCom Armor and HighCom Technology.