The Quickstep Holdings Limited (ASX: QHL) share price edged up slightly by 1.32% today after publishing its annual report, which highlighted an increase in net profit after tax (NPAT) of 44% compared with FY19.
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How did Quickstep perform in FY20?
Quickstep is a global provider of advanced composite solutions to the aerospace, defence, automotive and other advanced manufacturing sectors. This year's significant growth was due to contributions from many existing clients and projects.
For instance, the company provided increased volumes on the Lockheed Martin C-130J Hercules wing flaps, as well as securing additional market share on F-35 Vertical Tail and a new order for 10 additional F-35 centre fuselage parts. This was combined with new orders in rail and medical devices. FY20 also saw Boeing emerge as an increasingly important partner for the company.
As well as the headline 44% increase in NPAT, financial results were strong throughout FY20. For instance, Quickstep saw an increase in total sales of 12% compared with FY19, and was able to achieve a statutory earnings before interest and taxes margin of 10.1%.
The company also continued its efforts to increase efficiency. In FY20, this included beginning the move to a paperless workshop floor, new Eastman cutting machines, and optimised materials cutting. The latter has lead to $100,000s in savings per annum.
Optimistic future outlook
In addition, the company disclosed an optimistic view of the future. For example, recently announced increases to Commonwealth defence expenditure, and changes to procurement regulations, represent potential significant additional tailwinds.
Moreover, Quickstep highlighted the opportunity in sectors like unmanned aircraft, guided weapons and aircraft maintenance, repair and overhaul. Accordingly, the company expects to make further investments in domestic business development.
At the time of writing, the Quickstep share price is 1.32% up for the day at 7.7 cents per share.
