Cordel on track as revenues surge and losses narrow
() , which operates a leading AI platform for transport corridor analytics, announced audited results for FY23 ended June 30 2023. Total revenues increased by 34% to £3.05m and its pre-tax loss narrowed by 61% to £455k from £1.2m a year ago. Total expenses decreased 5%, as the company refocused on core LiDAR + AI solutions. Cash balances and trade receivables on June 30 2023 was £2.7m.
Operationally, Cordel signed a crucial US$6.7m 6-year contract with Amtrak (USA) to supply a fully automated software suite for survey and clearance management. The company also signed a 5-year contract with Angel Trains in the UK to install fully-automated hardware onto passenger trains.
Furthermore, Cordel won a 12-month contract with Australian One Rail to deliver its LiDAR-based solution for ballast profile analysis. It also joined Microsoft's ISV Success program to work with the software giant's Rail Industry Sector team, and launched a partnership with Ricardo to identify and pursue opportunities in railway inspection and asset management. Post-period, Cordel extended its contract with ARTC Australia to August 2024.
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A positive set of results from Cordel, building on momentum from FY22 with 34% revenue growth and a strong deal pipeline, which combined with a solid base of recurring revenue contracts gives it good visibility into FY24 and beyond.
The Amtrak contract in particular marks a value inflection point as the company's first meaningful achievement in the US market. Furthermore, Cordel's strong and growing relationships with Network Rail and Angel in the UK and ARTC in Australia give it significant room for future revenue growth.
Overall, Cordel is executing on its growth plan outlined at the March equity placing where it raised £1.7m. Losses are sharply down from last year, with a healthy cash position to maintain momentum into FY24. Broker Zeus forecasts that revenue will increase by more than 50% in FY24 driven by continuing and new contracts, with a gross margin maintained at c. 75% and persisting losses due to £1.2m of planned investment in new hires to support medium-term growth.
Zeus' DCF-based valuation is 22p which represents excellent potential upside to the current share price. Cordel is trading on a forward EV/Sales of just 1.4x.
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