SciDev Ltd (ASX: SDV) shares are soaring today after the company released its half-yearly report. In morning trade, the SciDev share price jumped 10% to an intraday high of 77 cents before retracing to its current price of 73.5 cents, up 5%.
Why is the SciDev share price rising?
The ScidDev share price is responding positively today after the company announced its first-ever profit.
ScidDev's revenue for the first half of FY21 came in at $18.3 million, reflecting strong business development across all four of its sectors. As drilling activities continued to rebound, the oil and gas sector's continued growth delivered an impressive $6.9 million towards revenue. All up, this drove the impressive 300% in revenue growth compared to the same period last year.
Cash receipts were also strongly higher on the prior corresponding period, rising from $3.8 million to $15.8 million for the half. However, despite the strong uplift in cash receipts, cash from operating activities was negative $4.6 million for the period. SciDev claims that the negative cash flow reflects timing differences between revenue and costs, and a product inventory build as the company aims to drive future growth.
Despite the negative cash flow, SciDev held $7.1 million in cash at the end of the half, ending the period with $3.5 million of inventory on hand.
Reflecting on the company's performance in the first half of FY21, SciDev chief executive officer Lewis Utting said:
It is pleasing to deliver a profit over this period. The strong revenue growth we delivered is a positive reflection of the continued work from the SciDev team and the growing acknowledgement and appreciation from the market for our bespoke products and technology.
Importantly, we are continuing to progress towards cashflow sustainability. The Company delivered a positive net cashflow from operations of A$1.8m in the second quarter. With our growth pipeline and strong gross profit margin we will continue to push towards positive cash generation over the remainder of FY21.
Also in today's update pushing the SciDev share price higher, the company commented on its plans for the remainder of FY21. These include focusing on SciDev's presence in the North American oil and gas sector. On this front, the business is continuing discussions with technology partners in the area. It also plans to carry out ongoing assessments of strategic growth opportunities globally.
The SciDev share price has had a disappointing time as of late, falling by more than 4% over the last month prior to today's rise. Incorporating today's share price gains, SciDev shares are up 0.68% for the one-month period. In comparison, the All Ordinaries Index (ASX: XAO) has risen 2.2% over the same period.