The Carbon Revolution share price is soaring 14% higher today following on the release of its quarterly activities report.
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The Carbon Revolution Ltd (ASX: CBR) share price was soaring 14% higher today on the release of its quarterly activities report this morning.
A relative newcomer to the ASX, the Carbon Revolution share price hit an all-time high of $4.47 per share on 24 January. Then the coronavirus pandemic struck and by 23 March the share price had plummeted by 82%.
The company has come back strongly since then, with today’s gains bringing the share price up 254% from the 23 March lows.
Year-to-date, the share price is down 17%. By comparison the All Ordinaries Index (ASX: XAO) is down 6% in 2020.
What does Carbon Revolution do?
Carbon Revolution is an Australian company that innovates and commercialises carbon fibre wheels for the global automotive industry. The company designs and manufactures high-performing wheels for some of the fastest street cars and top-quality brand names in the world.
Carbon Revolution’s shares first began trading on the ASX in November 2019.
Why is the Carbon Revolution share price soaring?
Despite noting that the pandemic continued to cause disruptions as the virus impacted customers, Carbon Revolution reported quarterly recognised revenue of $11.8 million. That’s up 45.9% on the previous quarter and up 26.3% on the previous corresponding period (pcp).
Commercialisation of the company’s new “fascia” technology has also begun with initial customer approval. According to the report, the technology “dramatically improves the conversion of moulded wheels to sold wheels and, in turn, drives a significant reduction in labour cost per wheel”. The company expects its first deliveries will start in the next quarter.
In addition, Carbon Revolution announced that upgrades to its high-pressure moulding equipment and installation of a new automated face layup line have been completed. This provides it with enough moulding capacity for its contracted programs (both announced and unannounced).
The company’s cash balance at the end of this quarter was $19.6 million. It said the business was funded for its FY21 operational goals.
Looking ahead, the company expects strong sales growth in the 2021 financial year. In addition, over the next 3 quarters, net cash flow from operating activities will be positive. The report also noted that the Federal Government JobKeeper package should support a proportion of wages while the company remained eligible under the JobKeeper scheme.
The Carbon Revolution share price has retreated slightly since its 14% morning high. It is now trading at $2.80, up 11.55% at the time of writing. On a day the All Ords is slipping, it appears that investors are happy with the company’s quarterly performance.
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Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Carbon Revolution Limited. The Motley Fool Australia has recommended Carbon Revolution Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.