Electro Optic Systems Holdings Ltd (ASX: EOS) shares are up around 180% over the past year, but the company remains under-the-radar of many investors.
The company is in the industrial engineering space and specialises across the defence, space, and communications sectors.
Its core products are weapons used in warfare including vehicle turrets and other high-tech weapons systems.
Over the six months to June 30 2019 it reported a net profit of $7.5 million on sales of $57.4 million.
Today it reaffirmed guidance for calendar year 2019 EBIT to land around $20 million. Moreover, it upgraded calendar year 2020 EBIT guidance to come in between $33 million to $35 million. This would equal growth around an impressive 70% thanks to a strong new order book.
Total EBIT over 202o when including the input from its acquisition of EM Solutions Pty Ltd is expected to be even higher at $36 million to $38 million on an EBIT margin of 15%.
Management is taking advantage of its purple patch by looking to raise $68 million from investors at $6.66 per share.
This is actually at a 0.8% premium to the stock's last closing price of $6.61 and probably reflects the fact that it has significantly upgraded profit guidance at the same time as announcing the raising.
Other management teams may have tried the capital raising after announcing an upgrade in the hope of getting the offer away at an even higher valuation.
However, given its recent success, I expect EOS, its shareholders, and management team will all be feeling good about themselves right now.
