What drove VVPR's EPS surprise in late 2019?

VivoPower's EPS surprise in late 2019 was primarily driven by significant improvements in revenue and gross profit within its Critical Power Services segment, alongside reduced corporate overheads and a strong Australian solar development performance.

1. Revenue Growth in Critical Power Services: The company reported an 80% increase in gross profit in Critical Power Services, which grew by 66% in revenue. This segment's strong performance was due to:
   • A record forward order book of $54.2 million for delivery in fiscal 2020.
   • Operational efficiencies and pricing initiatives that led to a 23% increase in gross profit.
2. Reduced Corporate and Solar Overheads: VivoPower achieved a further 42% reduction in Corporate Office and Solar Development overheads, resulting in annualized savings of $2.1 million. This reduction in overheads contributed to improved profitability.
3. Australian Solar Development Momentum: The Australian solar development business was gaining momentum, supporting the overall turnaround of VivoPower. This was reflected in the significant order book and the expectation of returning to profitability.
4. Monetization of U.S. Solar Portfolio: VivoPower was actively working on monetizing its U.S. 1.7 GW solar portfolio, aiming to maximize value from this asset. This strategic move could have potentially improved profitability in the period.

In summary, VivoPower's EPS surprise in late 2019 was driven by strong revenue growth in its Critical Power Services, significant reductions in overheads, and the positive performance of its Australian solar development business. These factors collectively contributed to the company's improved financial results and return to profitability.