Aussie AI-based security platform business Spectur Limited (ASX: SP3) released its Q3 FY23 quarterly report highlighting further consolidation of the company, $5.3 million year-to-date (YTD) revenue and a sales pipeline at its highest level yet.

Following the company’s acquisition of 3 Crowns Technologies (3CT) in February 2023, Spectur has acquired 100% control and ownership of its New Zealand operations, Spectur NZ, through the purchase of 49% of the business held by joint venture partner Deus Ex Limited.

“We are very excited about realising the potential to grow Spectur, as we consolidate our position around the legacy Spectur Limited, 3CT and Spectur NZ operations,” Spectur Managing Director, Dr Gerard Dyson said.

“Following this very busy period with corporate transactions we expect to return our focus to the conversion of sales, driving revenue and realising integration efficiencies in Q4 FY23.”

Join Dr Gerard Dyson for an online investor briefing on Thursday, 4th May at 12pm (AEST) where he will discuss the company’s quarterly and plans for growth, and field questions. Register here or request a recording.

Focus on driving revenue

Spectur recorded revenue of $1.68 million in the quarter and Q3 YTD revenue of $5.29 million, up 20% on FY22 YTD revenues of $4.4 million. Recurring revenue for the core Australian operations were $1.07 million for Q3, equivalent to an annualised run rate of $4.3 million.

The consolidated recurring revenue run rate, including Spectur NZ and 3CT, is approximately $5.3 million per year – a significant improvement on the annualised run rate of $3.5 million in FY22.

While March was a slower month for sales, the company expects hardware revenue to increase in Q4 FY23 in response to traditional buying cycles and the Optus contract extension from Q3 FY23. Full revenue results from 3CT and Spectur NZ will be incorporated into the latter results.

Spectur: Revenue per quarter

On cash outflows, Spectur reported a total of $574,000 spent on investing activities including $489,000 on acquiring Spectur NZ and 3CT. A total of $636,000 was spent on operating activities including a number of one-off and irregular costs such as upgrades to cloud infrastructure, Enterprise Resource Planning (ERP) implementation, recruitment costs, inventory growth and more.

At the end of Q3 FY23, the company held $1.618 million in cash with $1.1 million debt.

“Reductions in management and general overheads, combined with expected ongoing margin improvements and top line growth will underpin the drive for financial independence and reaching consistent positive earnings,” Dr Dyson said.

Record-high sales pipeline

At the end of Q3 FY23, Spectur’s unweighted pipeline of sales opportunities was $11.5 million up 17% on the $9.8 million reported in Q2 FY23. The company’s probability weighted pipeline hit a record high of $5.2 million, up 14% on the $4.58 million reported in Q2 FY23.

Spectur: Sales pipeline

“The pipeline growth includes high confidence opportunities with Optus to match the expanded Statement of Works issued in Q3, as well as several other higher value opportunities with major construction, utility, beach safety and security reseller customers,” Dr Dyson said.

Join Dr Gerard Dyson for an online investor briefing on Thursday, 4th May 2023 at 12pm (AEST) to ask questions and hear insights into recent performance and upcoming plans. Register here or request a recording.

Reach Corporate provides Corporate Advisory Services, including managing investor communications on behalf of Spectur Limited and will receive fees for its services.