The Scidev Ltd (ASX: SDV) share price surged as much as 8% higher today following the release of the company’s half-year FY20 results.
Established in 2001, SciDev is involved in the development and application of both chemistry and process control for solids-liquid separation. SciDev’s capabilities are primarily used in the mining, resources, water and food manufacturing industries.
SciDev closed the day 1.41% higher at $0.72 per share, which brings the company’s market capitalisation to $93 million.
Strong revenue growth and reducing losses
SciDev reported revenue of $6.12 million for the six months to December 2019, representing a 382% increase on the prior corresponding period (pcp) of 1H19.
Pleasingly for the company, SciDev managed to reduce its net loss by 69% during the period to $191,000. However, net cash outflows from operations increased to $2.5 million, up from $0.7 million in the pcp. According to the company, the increase in cash outgoings was attributable to a product inventory build as it gears up to deliver on recent contract wins.
Overall, SciDev recorded cash receipts of $3.8 million and a net cash position of $3.07 million at the end of the period.
During the six month period, SciDev completed a $1.9 million acquisition of ProSol Australia. ProSol is a bespoke solutions business that delivers chemistry and services for the mining and water treatment industries in New South Wales.
SciDev also made another acquisition, private US company Highland Fluids Technology Inc, which was announced on 2 January this year. The purchase price of this acquisition was US$6 million and it will provide the company with access to the onshore oil and gas market.
Commenting on SciDev’s half-year performance, Managing Director and Chief Executive Officer Lewis Utting said:
“The first half of financial year 2020 was a period of record revenue for SciDev as we successfully executed on a range of business development opportunities globally.”
“Complementing our contract wins, we were pleased to have made two acquisitions – ProSol Australia and Highland Fluid Technology – which expand our addressable markets into attractive new verticals and geographies,” he added.
SciDev commented that it has so far maintained strong momentum into the second half of 2020. The company will remain focused on growing its existing organic growth pipeline and moving towards its strategy of positive cash flow generation during the short term.
During the remainder of FY2020, the company will also focus on integrating its Highland Fluid Technology business as well as drive business development opportunities available within the US oil and gas sector.
SciDev will also continue to grow its relationship with strategic partner, Nuoer China, and continue to develop opportunities within the domestic civil and construction industry.
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