Ann: VALMEC POISED TO EXCEED FY18 PERFORMANCE, page-8

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edshann

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15/03/19

13:22

Post #: 37774737
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Originally posted by edshann: ↑

Some of the contracts run into 2020 so not all will be done in FY 19 (eg Origin, Sydney Water and Westside).

Below I guess at some numbers for the second half of FY19, with my assumption on the flagged improved gross margin on 18.8% last half:

Revenue gross margin gross profit overheads profit before tax NPAT at 30% tax rate
$50 m 19.5% $9.75 m $7.5 m $2.25 m $1.6 m
$60 m 19.5% $11.7 m $7.5 m $4.2 m $2.94 m
$65 m 19.5% $12.7 m $7.5 m $5.2 m $3.64 m

Adding in the FY 19 1H of NPAT $1.34 m and revenue of $47.5 m gives:
Revenue full year $ 97.5 m, NPAT $2.94 m with EPS 2.4
$107.5 m, NPAT $4.28 m with EPS 3.4
$ 112.5 m, NPAT $4.98 m with EPS 4
EPS in 2018 was 3.7cps.

There are a lot of assumptions in the above, but that suggests we need revenue of $60-65 m in the second half to get around the same EPS as last year. Given some of the order book of $80 million runs into next year we presumably need more contracts to do that. The company expected "significantly" higher revenues and earnings in this half. I doubt revenue of $50 m in FY 19 2H fits that description, though with EPS at 2.4 it would justify the current share price with a PE of 10. EPS above that would justify a higher share price and seems to be implied by the company, but we will not find out what happens for 6 months. The shares are probably a buy if my numbering is correct. If we can build the order book FY 20 would look very good if revenue was running at an annualised rate around $120 million in the second half of this year.

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Interesting that a buyer for 1 million shares has moved bid from 22 cps up to 23 cps today. May clean out recent downward price pressure.

VMX Price at posting: 21.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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Ann: VALMEC POISED TO EXCEED FY18 PERFORMANCE, page-8

Top Stories

Panic, paranoia, and gangland politics: HotCopper users react to Dubber's missing $26M

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