Ava Risk Group Limited (ASX: AVA) (Ava Group or Company) today provides the following market update:
- Ava Group revenue is expected to increase by 62%-77% year on year.
- FY18 Ava Group revenue is expected to be circa $20.9m-$22.8m, which includes a $7.8m contribution from MaxSec Group Limited (ASX: MSP) (7 months of consolidation).
- Adjusting for one-off exceptional costs related to the takeover of MaxSec Group Limited, the Technology Division is expected to be Operating Cash Flow positive in FY18 and EBITDA positive from the mid-point of the forecast revenue range within this document.
- Adjusting for one-off exceptional costs related to the takeover of MaxSec Group Limited, the Ava Group is expected to make an EBITDA loss of between $0.1m and $1.3m. This represents a substantial improvement on the $7.5m loss incurred in FY17, whilst also incorporating the loss-making MaxSec Group Limited.
- The Services division remains on target for profitability during Q1 FY19.
- H2 group revenue was below internal expectations due to Q4 shipment timing delays that will push revenue recognition into 1H FY19. This will provide a strong foundation for growth within the 1H FY19, with H1 backlog expected to be circa $1.6m-$3.5m at 30 June 2018.
- Given the significant progress in FY18, the backlog of orders to be executed in Q1 FY19 and the significant short-term pipeline (decisions anticipated before the end of FY19) of +$280m, the outlook for substantial growth in FY19 is very positive.
- Q1 FY2019 is expected to deliver $9.8m-$11.7m revenue, comprising $1.3m-$3.2m of Q1 backlog and $6.5m of new technology division orders under late stage contract negotiations.