PWR Reported 52.5% Growth in its NPAT for H1 FY2019

On 25 February 2019 PWR Holding Limited (ASX: PWH) released its half year results for the period ended 31 December 2018. The company reported total revenue growth of 21.6% in the first half. The revenue stood at $24.8 million in H1FY19 as compared to $20.4 million in H1FY18. This included organic revenue growth of 16.6% primarily from European sales and favourable foreign exchange movements contributing 5%. This revenue growth has come with efficient utilisation of working capital resulting in a 55% improvement in operating cash flow compared to the prior corresponding period. The hedging strategy and exchange rate movements have contributed a benefit of $0.5 million at 31 December 2018.

The net profit after tax stood at $3.139 million in 1HFY19 compared to $2.059 million in 1HFY18, up by 52.5%. The prior year was impacted by one-off non-cash items which included a provision for disposing of non-core assets at C&R and the USA corporate tax rate changes. [optin-monster-shortcode id=”swikrbu1d9j9aq0o4cko”]

The capital investment program is largely complete with all new machinery acquired to date fully operational.  This capital expenditure has been funded through both a revised multi-currency finance facility expiring in 2023 and cash from retained earnings.

On the debt front, the company extended its finance facilities to 2023 and renegotiated to match growth expectations and earnings currency.

The company maintained strong cash flow and working capital management which resulted in EBITDA to cash conversion ratio of 73% in the H1FY19 as compared to 53% in H1FY18 with growth and capital expenditure fully funded via cash and minimal financing. Increase in working capital focussed on inventory for H2 FY19. Net operating cash flow for the company is up by 55% from the prior comparative period.

Managing Director of the company Kees Weel said that the company is placed well both operationally and financially for achieving the anticipated growth for FY20 which will be driven by the application of current and new technologies to new and existing business segments including micro matrix and cold plate technologies.

The company recently announced to pay a fully paid ordinary dividend of AUD 0.016 on April 5, 2019. The EX-date and the record date for the same are 27 March 2019 and 28 March 2019 respectively.

On the price-performance front, the stock of PWR Holding Limited last traded at $3.430 with a decrease of ~2.0% during the day’s trade and with a market capitalisation of $345.0 million. The stock has generated a YTD return of 12.90% and posted a return of 20.69% over the last six months. It has a 52-week high price of $4.040 and a 52-week low price of $2.180 with an average trading volume of 64,748. It is trading at PE multiple of 31.820x with an EPS of AUD 0.110 and with an annual dividend yield of 2.09%.


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