VEEM Limited (ASX: VEE) Updates Financial Expectations for FY25
Financial Performance Update
VEEM Limited (ASX: VEE) has revised its expectations for financial performance for the first half of FY25. The company now anticipates a revenue range of $33 million to $35 million, with EBITDA expected between $3.4 million and $4.0 million. Net Profit After Tax is forecasted between $0.4 million and $1.2 million. Previously, VEEM predicted higher figures and has attributed the shortfall to lower defence-related revenue and costs on industrial product jobs.
Operational Developments
Several operational adjustments have been made following recent challenges. VEEM has implemented cost reduction measures, including some staffing changes, aimed at improving margins. Additionally, the company has rectified a quality system issue that resulted in the reworking of incorrectly machined parts. This incident has delayed gyro sales, which are now estimated at $3.2 million for the half, with an order book valued at $3.6 million.
Future Expectations
Despite the current adjustments, VEEM maintains that there will be no change to its expectations for the second half of FY25. The company anticipates a return to historically normal margins, driven by revenue contributions from defence orders and new product lines. VEEM has recently secured a $1 million Defence Industry Development Grant, which will facilitate the installation of new manufacturing equipment in its expanded facility.
Leadership Insights
Managing Director Mark Miocevich expressed confidence in VEEM’s future performance, stating, “While we are not happy with the expected results for the first half of FY25, we are confident that with the changes we have now implemented… the second half and beyond will be back to our usual margins and levels of profitability.”
Motley Fool contributor Lianne Eastty has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Veem. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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