Quickstep Holdings says it will be cashflow positive for the 2019 financial year, despite a $2 million cashflow hit in the first quarter thanks to delayed customer payments.

Quickstep (ASX:QHL), which makes parts for the aerospace, defence and automative manufacturing sectors, is forecasting at least a 20 per cent rise in revenue for FY19, as well as positive earnings before interest and taxes (EBIT) and positive operating cashflow.

But the first quarter of the new financial year revealed negative operating cashflow of $2m, which the company said was due to “delayed customer payments”.

“Working capital temporarily rose by $5.6m as a consequence of the delayed receipts as well as increased sales,” the company said in a statement, though it was “partially offset by an increase in net deferred income of $1.9 million”.

That compared poorly with the June quarter, in which Quickstep had $1.1m in net cash from operating activities.

But receipts from customers rose 11 per cent in the September quarter, rising to $15.6m. Sales revenue also hit $17.6m, a 6pc boost on the June quarter.

Quickstep shares were up 8pc on the news.

Quickstep shares (ASX:QHL) over the past year.

Quickstep is making some of its money from the controversial Joint Strike Fighter program, with the company saying it will manufacture and supply more than $1 billion in JSF composite components.

Last month, Australia had to ground its entire JSF fleet after a catastrophic crash in America led to a reassessment of safety measures.

But Quickstep is not worried, saying it expects to increase JSF revenue by more than 40 per cent in the 2019 financial year.

“Improvement in gross margin is expected as JSF volumes continue to increase,” it said, though it admitted that Q1 gross margin was hurt by “supply chain stress”.

“A comprehensive supply chain management strategy is in place to address supply chain risks,” the company says.

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