Transition Year in Preparation for Growth

Quickstep Holdings (ASX:QHL), the manufacturer of advanced carbon fibre composites, announced today that total revenue for the financial year ended 30 June 2017 increased to $52.6 million

28th Aug 2017


Transition Year in Preparation for Growth

 

Sydney, 28 August 2017 – Quickstep Holdings (ASX:QHL), the manufacturer of advanced carbon fibre composites, announced today that total revenue for the financial year ended 30 June 2017 increased to $52.6 million, up 4% from $50.6 million in the prior year. Strong growth in JSF volumes were offset by lower volumes of wing flap assemblies for C-130J. Total JSF deliveries were 1,230 parts, an increase of 108% on the 590 parts delivered in FY16. C-130J shipset deliveries of 27.25 (26 shipsets and 5 spares) returned to normal program volumes after 35 ship-sets were delivered in FY16 as scheduled by Lockheed Martin.

 

Earnings before interest, tax and research and development was a loss of $0.2 million, compared to a profit of $1.3 million in FY16, driven by lower margins due to the changing program mix and impact of the learning curve. Research and development costs for FY17, including new technology and product development costs, were $5.5 million. After financing costs, the net loss for the year was $6.7 million.

 

Capital expenditure increased to $3.9 million in FY17, completing projects for forecast production volume increases at Bankstown. This included capital investment for the expansion of JSF production, and the commissioning of automated robot drilling for C-130J production, which will deliver improved efficiency and productivity. These investments are now installed and provide Quickstep with further production capacity to take on additional manufacturing work.

 

During FY17 significant R&D was undertaken. This was critical to further developing the company’s proprietary process technologies and the new business and production programs at the company’s Geelong facilities. R&D expenditure is fully expensed in the year incurred. Quickstep made substantial progress in the commercialisation of our proprietary capabilities: extensively upgrading the Qure process; developing the key elements of the Quickstep Production System (QPS); developing new tooling and preforming concepts; and developing and deliveringcompletemanufacturingsolutionsfortheKIST,Micro-Xandfrontfenderprojects. Thebusinesswillnow progress with commercialisation of the technology and lower R&D spend.

 

Learning curve for the JSF program and the new drilling equipment for C-130J impacted the FY17 financial results, and the company is still at a relatively low capacity utilisation at its Bankstown site. Future production volumes are forecast to increase substantially; current JSF production represents approximately 50% of FY19 forecast volumes and 45% of FY20 and FY21 volumes. As production and total sales continue to increase, the company will benefit from economies of scale and improved profitability.

 

FY17 saw a significant change in Quickstep’s leadership team with recruitment of Mark Burgess as CEO and Managing Director in May 2017, following the resignation of David Marino for personal reasons. A realignment of the executive management team followed a strategy and operational review undertaken by Mark Burgess and the Board. Quickstep now has a strong and highly capable leadership team with extensive aerospace, defence and broader manufacturing and automotive experience, this team has sound capability and experience in leading, improving and growing a globally focused advanced manufacturing business.

 

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