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How Does Starburst Holdings Ltd Make Money?

It is important to know what a particular company does and how it makes money before investing in it. Investing in a business without such knowledge is akin to travelling to an unknown territory without a map.

On that note, let’s check out what business Starburst Holdings Ltd (SGX: 40D) is involved in and how it generates its revenue.

The company specialises in the design and engineering of firearms-training facilities and has around 17 years of experience. The table below shows the revenue contribution of each segment for the financial year ended 31 December 2016 (FY2016):

Source: Starburst Holdings Ltd 2016 annual report

The firearm shooting range business segment is involved in the design, fabrication and installation of indoor, outdoor and modular live-firing ranges, close quarters battle houses and method of entry training facilities for military and law enforcement organisations. Starburst also installs a proprietary Searls anti-ricochet panels at these live-firing ranges to prevent fired rounds from ricocheting.

Moving on, the tactical training mock-ups business segment relates to the design, construction and installation of live-firearm and non-live-firearm training mock-ups, and full-sized training mock-ups. These mock-ups simulate scenarios, such as rescue and evacuation operations, aviation and maritime operations, and counter-terrorism operations.

Last but not the least, the maintenance services and other business segment is involved in the maintenance services for completed firearm shooting ranges and tactical training mock-ups.

It also designs, supplies and fabricates steel struts and steel beams for temporary or permanent structural and architectural steel works on an ad-hoc basis. Furthermore, Starburst is involved in the design, construction and installation of ballistic protection and security systems for high-security detention facilities, among others.

The following shows the revenue contributions from the two regions the firm operates in:

Source: Starburst Holdings Ltd 2016 Annual Report

Now that we know the basics of Starburst Holdings Ltd’s revenue streams, we can then delve into other aspects of the firm such as its profitability, strength of its balance sheet, its cash-generating abilities and so on before deciding to invest in it.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.