Analysis and Commentary

Stock market investors look to Micro-X to lift sales

Analysis and Commentary

By Peter Roberts

Technology shares especially for start-ups have been shunned by investors for months now, but until the past week Adelaide cold cathode X-ray machine manufacturer Micro-X had weathered the storm better than most.

However in the past week the market marked down the company’s shares, delivering a warning that it is becoming impatient with slow progress in turning the company’s genuinely world-leading technologies into sales.

Shares were at a high around 41 cent a year ago and had fallen to 30 cents late last year before plunging to close at 16.5 cents on Friday.

Looking at the company’s results for the six months to December released on Friday the stand out figure for investors in these uncertain times is that of revenue – sales of $1.4 million of mobile X-ray machines in the six months, a figure that to some eyes would look rather static over time.

Other income of $2.8 million came in the form of $1.7 million in R&D tax refunds, $500,000 of an $8 million contract received from the Australian Stroke Alliance and $200,000 received from a similarly sized contract from the US Department of Homeland Security.

These two contracts represent part of the potential upside of Micro-X’s position as the first and only company to be able to produce a lightweight, low-power consumption X-ray emitter from an array of carbon fibre nanotubes.

The stroke alliance is funding development of a cheap, portable CT stroke imager for ambulances while homeland security is backing an airport passenger checkpoint imager – both of which coulkd be transformative for Micro-X.

The company also is close to launching a man-portable improvised explosive device (IED) X-ray Camera that will transform military and security services’ ability to detect IEDs at a distance (pictured).

Stand-Off imaging capability in the device uses backscatter imaging technology to detect threats such as bombs, drugs, and other organic material. This is another potentially transformative product.

It is true that the company has spent big in the past year on sales and marketing, appointing its own sales staff internationally to sell its Rover portable X-ray machines for civilian, and potentially military use.

Until recently the company did not control its own sales channels with a third party company Carestream marketing its devices as the Nano.

They new staff have been busy at numerous international expos where the company’s own-branded products have received an enthusiastic response.

There is certainly lots of promise in Micro-X, but with an election looming and bombs falling, investors are increasingly looking to sales and profits.

The author has a financial interest in Micro-X.

Picture: Micro-X

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