Threat Protect share price surges 25% on business update

The Threat Protect share price was storming higher today following the company's business and guidance update. We take a look at the details.

The Threat Protect Australia Ltd (ASX: TPS) share price has rallied today after the company provided the ASX with a very positive business update and offered guidance for FY21. Following the update, the Threat Protect share price surged a huge 25%.

chalk board with 25% written on it

Image source: Getty Images

What does Threat Protect do?

Threat Protect is a leading security company that supports thousands of customers across Australia. It offers both residential and commercial services on a local and global scale. The company identifies security risks and provides personalised solutions for its clients.

Threat Protect offers three main services which include its safe haven app, home solutions and business solutions. The company claims to be the largest provider of wholesale monitoring services and the largest non-international owned monitoring company in Australia. Threat Protect currently monitors approximately 80,000 accounts through its national infrastructure.

Business update

The Threat Protect share price saw a substantial 25% jump today on the positive news in the business update. The company announced significant improvement in financial outcomes as a result of integration and cost cutting. This was aided by the shutting down of surplus monitoring facilities. 

Current projections show the business to be in a positive cash position after payment of interest and principal repayments.

The update also notified the market of the company's continued product growth. As the largest provider of wholesale monitoring services in Australia, Threat Protect aims to leverage its size to expand into the Duress, Medical and Ageing sectors.

The company also released some key financials. Threat Protect announced revenue of almost $27.8 million for 2020; a huge 41% increase year-on-year. As impressive, was the company's normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) numbers. Threat Protect reported $4.9 million EBITDA which was an increase of over 70% on last year's results.

Guidance for FY21

Threat Protect also provided earnings guidance for the financial year ended 30 June 2021. It was announced that the board expects FY21 revenue to be in excess of $27 million, with FY21 normalised EBITDA to be in the range of $7.5 – $8.5 million. However, it was noted that the earnings guidance may be impacted by adverse changes in global economic conditions, including the significant impacts of COVID-19.

What's next for the Threat Protect share price?

The Threat Protect share price has had a torrid twelve months, losing 46% of its value this year alone. Shareholders will be hoping this news can spur the company higher, with the Threat Protect share price closing the day at 7.5 cents cents.

Motley Fool contributor Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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