DXN Limited's Impressive Q4 and FY24 Financial Performance
DXN LIMITED (DXN) Share Update July 2024 Tuesday 30th
DXN Limited Reports Strong Q4 and Positive Cash Flow for FY24
DXN Limited, a specialist in prefabricated modular data centres, has announced remarkable financial results for the fourth quarter and the full fiscal year 2024, showcasing substantial revenue growth and achieving positive cash flow for the first time in its history.
Instant Summary:
- Q4 revenue increased by 145% to $3.8 million.
- FY24 revenue rose by 41% to $10.9 million.
- Positive net operating cash flow of $1.04 million in Q4 and $327k for FY24.
- Unaudited FY24 EBITDA anticipated to be $402k, compared to FY23 losses of $4.9 million.
- Cash balance as of June 30, 2024, was $2.98 million.
Financial Performance
DXN Limited reported a total revenue of $3.8 million for Q4 2024, marking a 145% increase from the same period last year. For the full fiscal year 2024, the company's revenue rose by 41% to $10.9 million, driven by the deployment of new modular data centre sales across multiple clients.
In terms of cash flow, DXN achieved a positive net operating cash flow of $1.04 million in Q4 and ended the fiscal year with a positive operating cash flow of $327k, a first in the company's history. The unaudited EBITDA for FY24 is anticipated to be $402k, a significant improvement from the $4.9 million loss reported in FY23. After adjusting for restructuring costs, the underlying EBITDA is $1.2 million.
Operational Highlights
During Q4, DXN completed its exit from the Sydney Data Centre (SYD01), which is expected to save the company approximately $1.4 million per annum in lease costs and related expenses over the remaining nine years of the lease. The company also recognized $3.1 million in modular revenue for Q4, bringing the total FY24 modular revenue to $8 million, a substantial increase from $875,000 in Q4 2023.
On May 9, 2024, DXN signed its largest contract to date, a $5.7 million deal for four Cable Landing Stations for the East Micronesia Cable System (EMCS). Additionally, the company secured several smaller modular data centre contracts totaling $1.8 million with a global internet company for delivery in the first half of 2025.
Strategic Moves and Governance
DXN's new Board is evaluating strategic options for the data centre business. The company has also made significant corporate governance changes, including the appointment of Abigail Cheadle as Non-Executive Director and Chair of the Board, and Shalini Lagrutta as Managing Director. Laila Green was appointed as Interim Chief Financial Officer on June 13, 2024.
Outlook
Looking ahead, DXN anticipates strong demand for remote computing power and subsea cable infrastructure deployment. With a comprehensive restructuring and a reduced cost base, the company is poised to achieve profitability and generate positive cash flow in FY25.
DXN Limited's impressive financial performance and positive cash flow are likely to boost investor confidence. The company's strategic moves, including exiting the costly Sydney Data Centre lease and securing significant contracts, position it well for future growth. The anticipated profitability in FY25 could positively impact the company's stock price as investors respond to the improved financial outlook.
Investor Reaction:
Analysts are likely to react positively to DXN's financial performance, particularly the achievement of positive cash flow and the significant revenue growth. The strategic decisions made by the new Board and the securing of large contracts are expected to be viewed favorably by investors.
Conclusion:
Investors should keep an eye on DXN Limited's progress as the company continues to refine its focus on core offerings and aims for profitability in FY25. The strong financial performance and strategic moves indicate a promising future for the company.