How Did These Industrial Players Perform This Earnings Season – CYG, DRO, RWC, NWH?

How Did These Industrial Players Perform This Earnings Season - CYG, DRO, RWC, NWH?

Every investor scans the latest earnings release of the companies under his consideration in order to play the investment game. There are some companies, which have recently provided their earning release and delivered decent revenue growth. Every investor looks for good dividend, decent top-line and bottom-line growth, etc. Let’s have a deeper look at the following stocks:

Coventry Group Limited

Coventry Group Limited (ASX: CYG) is primarily into the business of trade distribution and gasket manufacturing. The company recently published its investor presentation, wherein it outlined its operational and financial performance for the full-year period ending June 30, 2019. The substantial holders of the company include Viburnum Funds, Sandon Capital, Spheria Asset Management and Lanyon with voting power of 30.8%, 8.1%, 6.6% and 6.4%, respectively. The company further stated that the acquisition of Torque was wrapped up on 31st October 2018. Additionally, the acquisition of the diversified engineering services provider expands the Group’s and FS’s presence in South Australia. Coventry Group Limited also acquired Nubco on 1st March 2019. Nubco is a leading supplier of industrial and hardware products throughout seven store locations headquartered in Devonport. The company stated that the trading performance has improved significantly during FY19 with the group returning to underlying profitability for both EBITDA and EBIT. The company recorded group sales growth of 20.4% and 7.0% for FY19 including acquisitions and excluding acquisitions, respectively. The group reported underlying EBITDA amounting to $2.8 million including acquisitions.

The company reported strong balance sheet with decreased net debt to $4.1 million as at 30 June 2019. The net assets stood at $101.0 million. It added that the business is highly cash generative with limited capex and $71.9m tax losses available and the future acquisitions to be financed by operating cash flows and debt

Outlook

Coventry Group Limited has negligible exposure to the residential construction market. The company made a forecast of FY20 EBITDA of $10 million assuming the continuation of current trends and no adverse broader market developments. The medium-term target of 7.5% Group EBITDA margins remains.

Moving to the past performance, the stock of Coventry Group Limited last traded at A$1.020 per share with a rise of 2.513% on the trading session of 30th August 2019. In the time frame of three months and six months, it witnessed a fall of 22.09% and 15.70%. When it comes to the time period of one month, CYG provided a return of 13.07%.

Droneshield Limited

Droneshield Limited (ASX: DRO) is involved into development, commercialization and sales of hardware and software technology for drone detection and security.

Recently, the company through a release updated the market with results for the half-year ended 30th June 2019. It recorded revenue from continuing activities at $ 2,557,727 for the half year ended 30 June 2019 as compared to $383,891 for the half year ended 30 June 2018, which reflects a year-over-year increase of 566%. It posted loss from continuing activities after tax attributable to members of $2,662,411, which reduced 25% compared to the corresponding period of prior year. During the half year, Droneshield Limited has focused on refining its multiple-method detection products and its drone mitigation products as well as marketing them to end-users throughout law enforcement, airports, critical infrastructure, military and other segments in its 70-country global distribution network.  In the half year, the company has announced strategic partnerships with Collins Aerospace and Saudi Telecom. Droneshield Limited has established a new office in the UK (United Kingdom) alongside the existing Australian and US offices. The new office allows the company for more effective interactions with European customers. Previously, the company had rolled out DroneGun MKIIITM

The net cash used in the operating activities stood at $ 801,076 as at 30th June 2019, as compared to $2,420,153 as at 30 June 2018.

In other update, the company announced that Regal Funds Management Pty Ltd has become an initial substantial holder in the company with the current voting power of 8.29%, which became effective from 8th August 2019. The company also stated that Bergen Global Opportunity Fund, LP, Bergen Asset Management LLC and Eugene Tablis has made a change to their substantial holdings in the company with the current voting power of 25.53% as compared to the previous voting power of 31.84%, effective from 8th August 2019.

Moving to the past performance, the stock of Droneshield Limited last traded at A$0.280 per share with a rise of 16.667% on the trading session of 30th August 2019. In the time frame of three months and six months, it witnessed a rise of 65.52% and 113.33%. When it comes to the time period of one month, DRO provided a return of -25.00%.

Reliance Worldwide Corporation Limited

Reliance Worldwide Corporation Limited (ASX: RWC) is suppler, manufacturer and designer of high-quality water flow and control products for the plumbing industry. Recently, the company has released its full year 2019 results, wherein it communicated about the operational and financial performance of the group as well as its segments.

Segments Performance

The company stated its Americas segment has recorded continued sales growth with reported net sales amounting to $653.9 million, reflecting a rise of 16.8% on the corresponding period of prior year. However, the net sales amounted $604.2 million, with a rise of 8.6% on the comparative period, excluding John Guest acquisition. The growth was primarily fueled by continued end user demand for the company’s products, which include core SharkBite brass PTC fittings as well as accessories which continue to benefit from continuing conversion of plumbers away from using traditional fittings system. When it comes to EMEA segment (Europe, Middle East and Africa) performance, it reported net sales amounting to $ 360.9 million for FY19 as compared to $81.1 million in FY18, reflecting a rise of 345% year over year.

Group Performance

The company reported net sales amounting to $1,104.0 million for FY19, reflecting a rise of 43.5% compared to the year-ago period. Reliance Worldwide Corporation Limited posted reported EBITDA of $242.5 million, reflecting a rise of 79.1% over the previous year. In addition, the company stated that these increases reflect the first full year contribution from John Guest.  The company continues to maintain a strong balance sheet and conservative financial position. The net debt of the company stood at $426.6 million as on 30th June 2019. The net debt to EBITDA of the company stood at 1.67x.

Dividend

The company has declared fully franked final dividend amounting 5.0 cents, which makes the total dividend for the FY19 to 9.0 cents per share. The total dividend for the full year is $71.1 million which represents 53.5% of NPAT (Net Profit After Tax). It added that the final dividend is within the targeted range of 40%-60% of annual NPAT.

Moving to the past performance, the stock of Reliance Worldwide Corporation Limited last traded at A$3.830 per share with a rise of 2.957% on the trading session of 30th August 2019. In the time frame of three months and six months, it witnessed a fall of -1.06% and -18.24%.

NRW Holdings Limited

NRW Holdings Limited (ASX: NWH) provides diversified services to the resources, energy, civil infrastructure and urban development sectors. Recently, the company through a release dated 29th August 2019 announced that Rio Tinto has awarded the Koodaideri Mine Pre-strip contract to the company. It added that the value of project is around $95 million and is anticipated to have a duration of around 78 weeks with works commencing in November 2019. The scope of work under the contract include the development of initial mining pre-strip as well as earthworks infrastructure in order to allow the starting of mining operations. In other update, the company released its full year 2019 results, wherein it communicated about its operational and financial performance. The company reported revenue amounting to $1,126.3 million in FY19, reflecting a rise of 49% in comparison the corresponding, prior-year period. The comparative EBITDA stood at $144.0 million with a rise of 54% on comparable prior-year period. It posted NPATA of $40.4 million, up 19% over the year-ago period.

During the financial year 2019, the company has wrapped up acquisition of RCR Mining Technologies in consideration of $10 million, which was financed from cash and provides significant diversification in its services offering. It also secured new Civil contracts for three major Western Australia iron ore producers, which include South Flank, Eliwana and Koodaider

Cash Position

The company stated that the cash holdings have witnessed a rise to $65.0 million with strong cash conversion at 95%. There was structural improvement in Debt with acquisition finance and Corporate note related debt being repaid.

Dividend

The Board of Directors of the company have declared a final dividend amounting to 2 cents per share, fully franked. It added that the dividend is payable based on the NWH’s liquidity profile over the coming financial year. The company will be paying the dividend on the 10 December 2019.

Moving to the past performance, the stock of NRW Holdings Limited last traded at A$2.420 per share with a rise of 1.255% on the trading session of 30th August 2019. In the time frame of three months and six months, it provided returns of -18.71% and 4.37%. When it comes to the time period of one month, NWH provided return of -5.16%.


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