The Ava Risk Group Ltd (ASX:AVA) share price has stormed more than 40% higher in early trade after the company released a promising market update. The Ava Risk Group share price has since pulled back to 18 cents per share at the time of writing, which is up 24% on yesterday's close.
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What did the Ava Risk Group announce?
Ava Risk Group released a market update earlier today, detailing the company's earnings guidance and expectations for Q4 of FY20. The company informed the market revenue guidance for the June quarter has been lifted by $1.8 million to $12.3 million.
Ava Risk Group also expects that revenue for the second half of FY20 will be approximately $24.6 million, $2 million higher than previous guidance, with FY20 forecasted around $45 million. The company also expects total earnings before interest, tax, depreciation and amortisation for FY20 to $6.8 million, a $1.8 million lift from previous expectations.
In addition to providing a revised earnings guidance, Ava Risk Group also announced that the company's chief executive Scott Basham is to resign after joining the group in March 2019.
The company also acknowledged that its technology division had been impacted by the COVID-19 pandemic, with approximately $2.5 million worth of orders delayed.
What does Ava Risk Group do?
Ava Risk Group is a security services company that operates through its technology divisions, Future Fibre Technologies and BQT Solutions. The group's security solutions include intrusion detection for perimeters, pipelines and data networks, card access control and storage of high value assets.
Earlier this year, the company received a $2.4 million order from Australia's Department of Defence for access control technology to be implemented at its defence facilities and bases across the country. Ava Risk Group technology is installed in more than 70 countries and the group boasts an impressive client portfolio.
The group believes that with global security concerns growing, there is strong and growing demand for its technologies. The company expects to deliver strong revenue growth fuelled by its large sales pipeline and is well capitalised with $3.7 million cash on hand.
Foolish takeaway
At the time of writing, the Ava Risk Group share price is trading 24.14% higher for the day. The company's shares closed yesterday's session at 14 cents and hit an intra-day high of 21 cents earlier today.
