Cardno Limited (ASX: CDD) is an international professional services company operating in the infrastructure and environmental sectors, for both government and private sector clients. Cardno provides planning, engineering and environmental services within many market sectors including water, environment, mining and energy, coastal and ocean, buildings, land, and transportation.
Cardno Limited has recently announced its 1H FY19 results for the period ended 31 December 2018. As per the report the business has delivered an EBITDA from continuing operations of $27.9m down 7.6% from prior corresponding period (pcp), driven by the roll-off of significant projects in 1H18 and a number of specific business costs in Asia Pacific, business development investment in International Development and a more substantial proportion of revenues from lower margin businesses (Americas, ID). The Company’s Fee revenue increased by 9.7% in 1H FY19 as compared to pcp, primarily from construction sciences, Americas, International Development.
During the half year period, the company refinanced its bank debt facilities. The new facility is a three-year AU $110.75 million and US $83.0 million syndicated drawdown facility, expiring in December 2021. Following the completion of the Raba Kistner and TGM acquisitions in December 2018, the company is in net debt (cash on hand less debt) position of $110.9 million at the end of 31 December 2018 (net debt of $19.9 million at 30 June 2018). Included in the balance sheet is an increase of $90.7 million to intangible assets relating to goodwill, customer contracts and customer relationships acquired on the completion of four acquisitions during the half year ended 31 December 2018.
The company has reported a net operating cash inflow for the half of $4.8 million (inflow of $31.6 million prior comparative periods (PCP)). The change versus PCP is primarily driven by the timing of large government client payments received in H1 2018.
As regards to the outlook, the company’s operation is concentrated upon aspects such as cost control, organic growth, investments in people and on various strategic acquisitions opportunities.
The focus of the company is on returning the business to positive organic growth after the restructuring of the divisions over the past three years. The focus remains on medium-term EBITDA growth, with many investments in Financial Year 2019 which will limit the EBITDA growth in some divisions for the short term. The business will continue to explore ‘on strategy’ conservatively funded acquisitions to gain access to essential markets or skillsets. Moreover, the company has developed a disciplined M&A process.
Now, let us have a quick look at Cardno Limited’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $0.975, trading up by 2.632% during the day’s trade with a market capitalisation of ~$430.95 Mn. The counter opened the day at $ 0.965, reached the day’s high of $0.975 and touched the day’s low of $ 0.915 with a daily volume of ~159,731. The stock has provided a Year Till Date return of -5.00% & also posted gains of -21.49%, -12.44% & -5.94% over the past six months, three & one-months period respectively. It had a 52-week high price of $ 1.475 and touched 52 weeks low of $ 0.905, with an average volume of 129,547 approximately.
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