Trading Update & Appendix 4C
Trading Update & Appendix 4C
Sydney, Oct 29, 2020 AEST (ABN Newswire) - Etherstack (ASX:ESK) is pleased to present commentary on activities in Q3 FY20 and up to the date of this report, to accompany the lodgement of this Appendix 4C cash report for the quarter ending 30 September 2020.

All amounts are in $USD '000 unless otherwise specified.

Highlights

- Completion of the first stage of the Company's project in Northern Canada for the Royal Canadian Mounted Police, with second stage to commence this current quarter

- Completion of the first stage of the Company's digital radio network deployment in Western Australia for the resources sector

- New technology licensing deal in France with TPL Systemes, expected to contribute approximately $490 (AUD$685,000) in revenue recognition for the current financial year

- Commencement of engineering development and integration tasks associated with the previously announced Global Teaming Agreement with Samsung in relation to Mission Critical Push To Talk over LTE solutions

- Recurring support revenues, a key performance indicator, have remained strong year to date and for the quarter. September 2020 quarter support revenues are 14 % higher than the comparative quarter in 2019

- On 1 July 2020 the Company issued 3,333,334 shares to convert Convertible Notes into fully paid ordinary share capital. This transaction strengthens the net asset position and reduces future interest costs.

- Lease signed for new engineering facility in New South Wales to support engineering and manufacturing growth in our Australian operations

- Significant interest in the Company's products by the Australian defence sector resulting in multiple pursuits underway

Cashflow commentary

- Cash Receipts from customers of $923 for the quarter which is slightly down from previous quarters. There were 3 reasons for this:

o September quarter followed a very strong collections quarter for the 30 June quarter in which $2,248 was collected.

o While the general impact if Covid 19 is expected to be limited, there has been some minor timing issues with project activity, in particular the Company's project in Northern Canada. Activity and hence cashflow was delayed in the September quarter.

o Limited project activity in the quarter which can be irregular in nature.

- September quarter cash position is $767 which has fallen over the quarter as a result of:

o Reduced cash receipts from customers outlined above

o Loan repayments of $280 in the quarter making $516 in loan repayments for the year to date

o Sustained investment in intellectual property $295 for the quarter and $778 year to date

o the current quarter result excludes a further $280 received on 2nd October 2020.

- Payments for directors' fees and salaries for the quarter were $98.

Etherstack CEO, David Deacon said, "The Company is experiencing great deal flow across all markets with new wins in Canada, the United States, Europe and Australia. Our world class engineering team is demonstrating our ability to repeatedly deliver high complex systems and technology to government and manufacturing clients across the globe. The company is well positioned to capitalise on increased government and infrastructure spend in our traditional markets."

Impact of Covid 19

Management and the Board of Directors are continuously monitoring the impact of Covid 19. In general, the impact on the business is expected to be at the lesser end of the range and while there have been some timing impacts, as noted above, the company has been able to manage these issues to minimise disruption. Notwithstanding, a very high degree of caution will continue to be exercised through this uncertain period. Management and the Board of Directors will continue to monitor the impacts and take all necessary actions to protect the business and all stakeholders.

To view the report, please visit:
https://abnnewswire.net/lnk/J12CE95Z


About Etherstack Plc

Etherstack plcEtherstack (ASX:ESK) is a wireless technology company specialising in developing, manufacturing and licensing mission critical radio technologies for wireless equipment manufacturers and network operators around the globe. With a particular focus in the public safety, defence, utilities, transportation and resource sectors, Etherstack's technology and solutions can be found in radio communications equipment used in the most demanding situations. The company has Research and Development facilities in London, Sydney, New York and Yokohama.

 


Contact

Etherstack
David Carter, Chief Financial Officer
T: +61 2 8399 7500
www.etherstack.com

Media: Walbrook Investor Relations
Mr. Ben Knowles
T: +61 426 277 760
ben.knowles@walbrookir.com.au



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