Air-traffic tech company Adacel boosts profit guidance amid travel slump
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Air traffic management company Adacel (ASX:AMA) says it expects to post a full-year profit before tax of $4.8m this year.
The forecast marks a 20 per cent upgrade to previous guidance, despite the disruptions caused to the business from COVID-19.
The headline figures excludes a one-off litigation payment and a revision to expenses caused by a change in Australian accounting standards for leases, which are expected to amount to between $1.9m and $2.2m.
Shares in the company rose by around 20 per cent in morning trade to 52.5c, up from around 30c in March.
Adacel develops a number of tech applications in connection with air traffic management systems, speech recognition and air traffic control simulation and training platforms.
The company said that although global travel slowed to a halt, it was still able to book revenue from contracts associated with critical infrastructure installations.
Those projects included the partial completion of upgrades to MaxSim, Adacel’s flight simulator platform, for “existing customers in the US and Australia”.
In addition, Adacel “was able to expedite two Aurora air traffic management projects in Fiji and Portugal, while continuing to work remotely with customers”.
The company said it finished the 2020 financial year with around $5m in the bank.
“Looking forward to FY21, assuming modest and steady recovery from the COVID-19 disruption, we anticipate continued improvement in our financial performance,” CEO Daniel Verret said.
Mining software company K2Fly (ASX:K2F) also had a positive trading update, announcing quarterly revenue of $1.9m in Q4 — a gain of 44 per cent from Q4 2019.
The company said it booked a number of new clients in the quarter for its RCubed compliance program, including South32 (ASX:S32) and Orano SA, and has now booked around $2.36m in annual recurring revenues. Shares in K2F rose by around 12 per cent in morning trade to 22.5c.