'Tis the season for guidance updates26 July 2012
Companies are readying their annual reports at the moment and guidance updates are hitting the market. A couple came through just today...
Structural Systems Limited (ASX:STS)
- FY12 NPAT is forecast to be in the range of $7.6 to $8.0m.
- This includes an after tax loss of $1.855m for the Eastern Treatment Plant project.
- Revenue $275m+, up $40m year-on-year.
- Weaker second half due to "prolonged inclement weather" and lower utilisation of ROCK's drilling fleet.
- Work in hand now $197m+ compared to $167m this time last year
I had a previous forecast of $10m NPAT, so this result is disappointing. Despite increasing revenues, order book, and returning the concreting division back to profitability, the company's other construction divisions and mining services are not as profitable as last year. These numbers are certainly below my expectations.
On the other hand, the company is inexpensive trading at a P/E of 6, with some "freebie" profits to come once the treatment plant project is finally settled. I'm glad they did provide a breakdown for the loss this time around - finally some communication. But indication of the timeframe of when these losses will cease is what I'm really after.
STS last traded at: $0.725, up 3.5% for the day.
Supply Network (ASX:SNL)
This truck and bus parts business provided some unaudited numbers for FY12:
- Revenue $60.8m (up 20.3% year-on-year)
- EBIT $6m (+57.9%)
- NPAT $4m (+60%)
- 4cps DPS (+33%)
Fantastic result from this quiet over-achiever. Grew revenue, profits and margins significantly. Also had a second half that significantly outperformed the first with NPAT up 24.7%. With its steady growth over the recent years and return of equity around 25%, at current prices its still trading at an undemanding P/E of under 10. One to keep watching if you're not already!
SNL last traded at: $1.15, up 6.5% for the day.
Disclosure: At the time of publishing, I own shares in the two companies mentioned.
I’m not a licensed financial adviser and nothing on this site constitutes financial advice.