Tidy result, despite some work spilling over into the current half.
With Pre-Tax Profit up 110%on pcp and 45% on JH2018, this is a typical result of a high-fixed cost business emerging out of the bottom of its business cycle.
The operating cash flow figure was soft(@minus $1.1m) but that is explained by a $3.0m investment in working capital during the half ($2.1m of it for higher inventory), ostensibly to service those spillover orders.
I suspect KOV will make annualised EBITDA of $7.0m at some stage in the next 18-24 months, as the cycle "matures".
That would put the stock on an EV/EBITDA multiple of around 3.5x.
And while I wait for that to occur, I get paid a dividend yield of 8%pa, rising closer to 10%, I suspect, next year.
KOV Price at posting:
$2.78 Sentiment: Buy Disclosure: Held
