One of Nearmap Ltd (ASX: NEA)'s rivals in the aerial imagery space, Aerometrex Ltd (ASX: AMX), has just announced a major contract win with the Queensland Government.
Despite the positive news, Aerometrex shares are following the broader market down in early trade and have already plummeted 7.09% so far this morning.
What does Aerometrex do?
Aerometrex is a mapping business specialising in aerial photography, photogrammetry, LiDAR, 3D modelling, and aerial imagery subscription services and was recently listed on the ASX.
Aerometrex operates across Australia, and since 2015 has also delivered contract work in France, Germany, New Zealand and the United States.
It provides its products and services to a growing client base which includes Google, the Australian Government, CSIRO, and Microsoft.
The company's key rival in the Australian market is Nearmap.
Major win with the Queensland Government
Aerometrex announced to the market today that it had won 5 projects within the Queensland Government's Spatial Imagery Subscription Program for aerial imagery services.
This program is managed by the Queensland Government's Department of Natural Resources, Mines and Energy, and the total value of the 5 projects amounts to $1 million plus GST.
The 2 major projects cover the South East Queensland and Surat Basin North areas, along with North Queensland and the areas categorised as 'Remote Towns North' and 'Rural Towns'.
The company noted that the work is set to commence from April through to July this year and is scheduled to conclude in the third and fourth quarters.
Aerometrex has been involved with Queensland Government's aerial surveying programs since 2009 and currently employs 30 staff in Queensland. Its key Queensland bases are located at Buderim on the Sunshine Coast and at Brisbane's Archerfield Airport.
Recap of recent financial results
For the 6 months ended 31 December 2019, Aerometrex recorded a 44.3% increase in revenue over the prior corresponding period to $10.1 million. Normalised earnings before interest, tax, depreciation and amortisation grew even more strongly, increasing by 64.5% to $2.2 million during the first half. Aerometrex achieved positive operating cashflow over the 6 months.
The company appears to be fairly well positioned for growth, assisted by the raising $25 million from an IPO late last year. These funds will be used to capitalise on the high level of demand for imagery and mapping services, however it currently has a significant scale disadvantage compared to its major rival Nearmap.
