This morning, high-technology marine parts maker VEEM Ltd (ASX: VEE) is soaring 8% after releasing robust FY24 results.
Let's jump in to see what this ASX small-cap company just reported.
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FY24 headline numbers
These were some of the highlights from the result:
- Revenue increased by 35% to $80.6 million
- Earnings before interests, taxes, depreciation, and amortisation (EBITDA) increased by 48% to $14.8 million
- Net profit after tax increased by 70% to $7 million
- The company declared a final dividend of 0.77 cents per share, bringing the total FY24 dividend to 1.54 cents per share
VEEM delivered solid earnings growth despite expensing one-off costs, including $0.8 million for the Sharrow project and $0.5 million related to liver cancer treatment research.
On this last point, it's important to note that the company has been contributing its knowledge of induction heating technology in a research project with a Perth liver surgeon for the treatment of liver cancer for several years. The company decided to amortise the total amount relating to this project, which has led to this one-off pre-tax deduction against a profit of $0.5 million.
ASX small-cap firing in all cylinders
Overall, VEEM reported strong FY24 numbers in many aspects.
The highlight of the result was surging revenue from VEEM gyro stabilisers, the company's flagship product that innovates how ships are stabilised. The company sold 18 gyro stabilisers, generating $12.3 million in revenue, a substantial increase from $5 million in FY23.
An accelerated order from Strategic Marine largely drove the growth. In FY24, the company made VEEM's gyro stabiliser a standard feature on its fast crew boats.
In addition, VEEM's propulsion business saw strong demand, particularly for its fixed-pitch propellers. Propulsion revenue jumped by 26% to $35.3 million, with propellers alone contributing $29.1 million. The growth was supported by the installation of new machining centres. The company also automated the propeller manufacturing process.
VEEM entered into a partnership with Sharrow Engineering to design and manufacture Sharrow propellers, targeting inboard vessels up to 5 metres in diameter. The initial rollout is focused on select customers, with first deliveries and sales expected in 1H FY25.
Management believes its strong momentum will continue into FY25, highlighting "significant barriers to entry" for its gyro stabilisers, strong global demand for VEEM's propellers, and the rollout of Sharrow-by-VEEM propellers.
ASX small-cap share price performance
The VEEM share price has nearly three-folded over the past year, but it has been going sideways since April.
The VEEM share price is up 8% this morning, approaching its all-time high of $2.02.
