FY17 was a pivotal year for Windar Photonics Plc (LON:WPHO). An order for 300 units towards the year-end helped drive a doubling in revenues and suggests that the wind turbine industry is beginning to adopt its wind measurement technology. We leave our estimates and indicative valuation of 125p/share broadly unchanged, noting the potential for a substantial rise in indicative valuation once management is able to announce that the technology has been designed-in by turbine manufacturers, which is a key catalyst for volume deployment.
Strong growth in FY17
As flagged in the pre-close trading update, FY17 revenues rose by 85% y-o-y to €2.2m. This strong revenue growth was primarily driven by demand from independent power producers (IPPs). Growth was particularly strong in China. The cost base realignment resulted in a €0.8m reduction in operating costs to €2.2m and contributed to a €1.2m cut in EBITDA losses to €1.2m. In July 2017, Windar completed a subscription raising £1.25m (gross) at 82p/share, resulting in Windar having cash holdings of €1.1m (excluding restricted cash) at the end of December 2017. Noting arrangements with the Danish Export Credit Agency and a factoring agency to reduce working capital requirements, we calculate that this is sufficient to take Windar through to a sustainable cash-generative situation.
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