Highcom (ASX: HCL) – a homeland security provider
COMPANY SCOREBOARD
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ABOUT COMPANY
Highcom (HCL) (https://highcom.group/) is an international defence industry company listed on the ASX, operating as two distinct divisions, namely Highcom Armor and Highcom Technology.
In July 2019, the company acquired a US body armour and personal protective equipment company, HighCom, for 4m shares@45c and $1.8m cash. In CY2018.
CAPITAL STRUCTURE
| ASX Code | Share Price | Shares | Option (In) | Market Cap | Cash/Asset ($m) |
| HCL | 0.175 | 102682672 | 17969467.6000 | 5/31 |
| Holders No | Top 20 (Cur) | Top 20 (Pre) | Director Hold | Performance Right | Note |
| 2341 | 0.409 | 40.18% | 0% | last raise $7.7m@26c; pre raise $11m@69c |
All old directors resigned during FY21. Uwe resigned in February 2022 for medical reasons, he sold 2m shares@50c (still holds 3m) in October 2022. The successor CEO resigned again in Feb 2024 after a really bad year.
BUSINESS
Below is the company’s past three years performance
| HCL | 2024 | 2023 | 2022 | 2021 | 2020 |
| Operation Revenue | 45319192 | 89428127 | 58176725 | ||
| Cost of Sale | -31909174 | -60465174 | -32979100 | ||
| Gross Revenue | 13410018 | 28962953 | 25197625 | 0 | 0 |
| Gross Margin | 0.2959 | 0.3239 | 0.4331 | 0 | 0 |
| Overheads | -17239523 | -18134850 | -16836163 | ||
| Fixed Overheads | |||||
| Variable Overheads | |||||
| Total Operation Expense | -17239523 | -18134850 | -16836163 | 0 | 0 |
| Operation Profit | -3829505 | 10828103 | 8361462 | 0 | 0 |
| Other Revenue | -5371896 | 852614 | 455137 | ||
| Interest Expense | -255430 | -111158 | |||
| D&A | -1897580 | -1904560 | -1651533 | ||
| Income Tax | -441795 | -2815030 | -1426336 | ||
| Net Profit | -11796206 | 6849969 | 5738730 | 0 | 0 |
| NOTES | $5.9m impairment |
The company mismanaged the opportunity of multi-year SUAS supply contract by using a large proportion of the margin for self-rewarding.
For FY25, if the company sells $40m armors, out of which $30m outside of Australia. This equals to about 3x Highcom FY19 sales, which will give about $10m valuation based on 2018 acquisition metrics, and maybe $20m-$25m for the whole company including Australia sales, XClave and SUAS.
SUMMARY
The company seems to have found a good CEO.