The Strategic Elements Ltd (ASX: SOR) share price is jumping 9% on Monday as the pooled development fund reports its FY21 earnings.
Let's investigate further.
Strategic Elements share price jumps on strong growth in contract revenue
The company outlined several investment highlights in its report, including:
- Contract revenue growth of 34% year on year to $127 million
- Successful capital raise of $5.1 million through a share purchase plan
- Further $3 million raised via an institutional placement
- Loss for the year of $2.35 million versus $2.55 million the year prior
- $7.9 million in cash on the balance sheet, up from $2.27 million the same time last year.
What happened in FY21 for Strategic Elements?
In a positive for the Strategic Element share price, the company's wholly-owned subsidiaries exhibited progress in FY21.
For instance, the company's wholly-owned venture, Stealth Technologies, has developed the first "autonomous security vehicle (ASV)" in the world. The ASV has the designation of automating perimeter security, "reducing human involvement" in patrols.
Strategic is collaborating with the Defence Science Technology Group and the University of WA to conduct a live demonstration to the army. As such, both parties have committed to "providing $500,000 in cash and in kind resources".
Another venture, Australian Advanced Materials (AAM), is developing a self-charging battery and its "Nanocube printable memory technology" technology at the University of NSW.
The pair have formed a collaboration, and the Nanocube project received funding from the Australian government of $1.069 million over a three year period.
In addition, the company also completed a series of capital raises throughout the year, totalling $8.1 million before costs.
As per Strategic, all of the capital raised "will be used to advance existing 100% owned businesses and fund new potential opportunities".
What did management say?
Regarding the Nanocube and battery ink technologies, Strategic's directorship said:
The Nanocube Memory has been continually developed by the Company and the University of New South Wales during the year. A one megabit demonstrator is under development, however the rapid success of the Battery Ink led the Company to divert some resources away from the Nanocube Memory and deploy them to escalate the Battery Ink development.
What's next for Strategic Elements?
Strategic's subsidiaries are extending the application of technologies within the company's portfolio.
To illustrate, Strategic has been collaborating with Honeywell to build ASV's for the "correctional sector".
This will continue into 2022, with both parties now actively "negotiating a new agreement" to commercialise the ASV.
In addition, it has extended the ASV's application to weed identification in food crops. Here Strategic is collaborating with Australian Herbicide Resistance Initiative in field testing to advance the ASV sensor's weed identification capacity.
Aspects of this are expected to be "included into an expanded trial" conducted in November 2021.
The Strategic Elements share price has gained 75% this year to date, extending the previous 12 month's climb of 422%.
These returns have far outpaced the S&P/ASX 200 Index (ASX: XJO)'s return of around 25% over the past year.
