ESK receives digital radio network expansion order

By Megan Graham. Published at Dec 6, 2016, in Technology

Specialist wireless communications technology company Etherstack plc (ASX:ESK) today announced it had received an order for its equipment to be deployed on new sites for an existing P25 digital radio network established by the group in Australia.

The order, placed by ESK’s system integrator partner BAI Communications, is to expand the existing network at a value of AUD$422,000.

Importantly for the company’s balance sheets, the transaction is expected to come under revenue for the current financial year – thus boosting the numbers recovery after a quiet few years across the industry.

Etherstack plc CEO, David Deacon said of the expansion order: “During 2016 the company has continued to drive revenue growth through both new greenfield customers and our expanding installed user base. Substantial expansion orders demonstrate our customers’ high satisfaction with our products as well as fundamental improvements in our long term recurring revenues.”

In October, the company announced it had signed a substantial licensing contract with Japanese company NEC Corporation. The deal involved NEC – a company who integrate IT and network technologies, and have been around for over a century – incorporating ESK’s wireless technology into their products.

A month earlier, ESK announced a US$2.6 million contract with Ergon Energy which will bring in revenue over a five year period.

Both contracts boost Etherstack’s revenue guidance for 2016, which is currently on track to dwarf their figures for 2015.

Below is the company’s recap of contract wins for the 12 months to August 2016:

ESK has seen some share price fluctuations this year, and it could be argued that the current price doesn’t truly reflect the achievements listed above.

Here is a look of ESK’s share price over the last 12 months:

However it should also be noted that ESK is an early stage play and past or current share price performance is not reflective of current performance. Investors should seek professional financial advice if considering this stock for their portfolio.

If ESK can report robust revenue figures for FY 2016 as expected, it could be the catalyst the company needs to return to its 2015 highs.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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