EOS 0.61% $8.25 electro optic systems holdings limited

afr article - $20m earnings

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    Market cap $60m - Earnings $20m - Looks cheap - Any comments?

    Negotiations are close to finalisation for the reconstruction of the federal government's Mt Stromlo Observatory and satellite laser-tracking facility in the Australian Capital Territory.
    The federal government's announcement of the reconstruction of the Mt Stromlo Satellite Laser Ranging Observatory, which was destroyed by bushfires in January, is expected as early as next week.

    Technology company EOS which built the laser-tracking facility for the federal government in 1998, is expected to take the lead in rebuilding the facility, although company representatives declined to comment yesterday.

    But EOS chairman Fred Bart writing in the company's annual report in March said: ``The facility together with all EOS and government equipment lost in the fire is fully insured for replacement by EOS and a recovery plan for the site is already in affect.

    ``EOS and government representatives have begun planning the urgent restoration of facility operations by EOS.

    ``EOS has adequate parts and resources to complete this task [valued at] $9-$10 million to be funded by the proceeds of insurance."

    EOS also has a research and development start-up application before the Federal Department of Industry, Tourism and Resources.

    EOS is active in space systems, defence products and space surveillance. Headquartered in Queanbeyan, NSW the company employs about 55 staff, many with PhDs in scientific disciplines.

    EOS began operations in the early 1980s after a couple of scientists left government agencies to commercialise space-tracking technologies.

    Headed by Ben Greene , EOS won Australian government recognition and support through international space contracts and research and development grants into space and defence technologies. The company has also established a wholly owned subsidiary in Arizona which is engaged in the manufacture of large-scale telescopes.

    Employing about 25 staff, this US-based plant can manufacture eight to 12 large telescopes each year.

    EOS has also won a contract to supply and install an astronomical telescope in China valued at about $1.6 million. The company expects to win more telescope projects with the Chinese government.

    EOS listed on the Australian Stock Exchange in early 2002 following backing of Growth Property Investments Ltd. It has 28.6 million shares on issue and since March 2003 its share price has more than doubled to about $2.80 this week.

    EOS aims for income of about $20 million in 2003 and forecasts significantly stronger revenues in 2004 [fiscal period ends December] if potential contracts, largely from governments, come to fruition.
 
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