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In this article, we discuss eight stocks from the materials and industrial sector on ASX. Both of these sectors play a crucial role in infrastructure development and optimisation of resources. We have covered the latest news from these companies.
Aerometrex Limited (ASX:AMX)
Professional aerial mapping company, Aerometrex is a new name to the ASX bourse. Recently, the company partnered with Landchecker Pty Ltd via an agreement. It would see Landchecker utilising the company’s MetroMap image web services.
Landchecker’s professionals would access the imagery services for an additional fee, enabling the business to expand across the nation, which is presently operating in Victoria and NSW.
Initially, the agreement has a tenure of 12-months, which commenced from February 2020. It would enable AMX to expand revenues base.
On 14 February 2020, AMX last traded at $2.500, up 3.734% from the previous close.
ALS Limited (ASX:ALQ)
Testing and inspection services company, ALS Limited announced an acquisition last month. It acquired Aquimisa Group with over 20 million euro in annual revenues, an independent food testing business, having a footprint in Southern Europe.
The target business has national coverage through Spain as well as regional labs in Brazil and Portugal. The transaction was funded through existing debt facilities, and it was not subject to regulatory approvals.
Aquimisa specialises in microbiological and chemical analyses, food safety consultancy services and quality control. It was founded in 1994 and has over 350 employees.
The transaction is believed to complement the life sciences business in Europe while realising synergies from the existing footprint of the company in the region. It would be managed and integrated into the Life Sciences vertical in Europe, adding new capabilities and offering to the clients of the company.
On 14 February 2020, ALQ last traded at $9.76, down 0.102% from the previous close.
Boral Limited (ASX:BLD)
Building and constructions material company, Boral Limited has provided an update pertaining to its business recently. In December 2019, the company came across financial irregularities in the North American Windows business.
An investigation by the company has revealed that financial statements were misrepresented, resulting in an increase in overall profitability as well as health of the Windows business.
It was noted that pre-tax earnings were inflated by USD 24.4 million between March 2018 to October 2019. Financial statements would be restated to reflect the true picture of the business with an overall reduction in pre-tax earnings of USD 22.6 million.
It was said that net profit after tax before significant items for the 6- month period ended 31 December 2019 is $156 million. A 50% franked interim dividend of 9.5 cents per share was announced payable on 15 April 2020.
On 14 February 2020, BLD last traded at $4.72, down 0.422% from the previous close.
Downer EDI Limited (ASX:DOW)
Downer EDI operates an integrated service business with verticals, including utilities, mining & engineering, facilities, transport, construction & maintenance.
Recently, the company has disclosed results for the half-year ended 31 December 2019. DOW has recorded an increase in revenues, but earnings before interest, tax and amortisation of acquired intangibles & statutory NPAT was lower.
For the half-year, the total revenues were up by 3.3 per cent at $6.8 billion, EBITA was down 19.9 per cent at $214.8 million, EBIT was down 23.8 per cent at 180.4 million and statutory net profit after tax was down 35.4 per cent to $91.4 million.
EC&M revenues depicted a decline of 25.3 per cent to $238.7 million and Utilities’ revenue increased by 16.8 per cent to $203.6 million.
An unfranked interim dividend of 14 cents per share was announced, with record date on 26 February 2020 and pay date on 25 March 2020.
On 14 February 2020, DOW last traded at $6.83, down 1.014% from the previous close.
CIMIC Group (ASX:CIM)
Infrastructure company, CIMIC Group has recently announced that its subsidiary UGL secured contracts to provide maintenance, turnarounds, and project services for its clients in the oil and gas businesses.
It is expected that the contracts would deliver revenues of $450 million over a multi-year time frame, and the contracts would be active from December 2019.
The contracts include an extension and turnaround services at the Gorgon and Wheatstone facilities in WA, which are operated by Chevron. At the facilities, UGL has been delivering services, generating employment of over 1k people in addition to apprenticeship and new skilling opportunities.
Also, the contracts include an extension of integrated services for existing oil and gas sector customers of the company in Western Australia.
On 14 February 2020, CIM last traded at $27.390, down 0.976% from the previous close.
Wagners Holding Company Limited (ASX:WGN)
Wagners Holding Company is engaged in the business of construction materials, transport services, cement, flyash & lime, precast concrete, reinforcing steel and composite fibre technology.
In December 2019, the company secured a contract on South-east Queensland’s Cross River Trail Project. The contract would see the company supplying precast concrete tunnel segments for the Tunnel and Stations Works package.
It would require the company to manufacture all the precast concrete tunnel segments for the twin tunnels, which would be manufactured locally at the manufacturing facility in Brisbane.
It was noted that the manufacturing would commence in late 2020 and final segments are expected to be completed in late 2021. Subject to trading conditions, the revenue from the contract is expected at around $40 million.
On 14 February 2020, WGN last traded at $1.910, up 0.526% from the previous close.
Adelaide Brighton Limited (ASX:ABC)
Building products manufacturer, Adelaide Brighton has recently reported that verdict of the ACCC on Barro Group’s acquisition of 43 per cent stake in the company, which was acquired over a number of years.
The regulatory body analysed the acquisition on the grounds that Barro and ABC, two vertically integrated business, have an overlap for the supply of pre-mixed concrete, aggregate and cement.
The regulator found that ABC and Barro continue to face competition with Boral, Holcim and Hanson, which are the three similar companies with a national footprint as well as from the smaller independent competitors.
Competition impacts were reviewed in Melbourne, Brisbane and Townsville, where the operations of Barro and ABC overlap, and no areas of concern were identified. However, Barro did not seek clearance from ACCC for the acquisition; thus, the investigation may be reopened if required.
On 14 February 2020, ABC last traded at $3.200, down 1.235% from the previous close.
Pact Group Holdings Ltd (ASX:PGH)
In January 2020, Pact Group placed its contract manufacturing division on sale. It was noted that the sale process had commenced, and Citigroup was appointed to assist in the sale process.
Its on sale business includes Jalco, Pascoe’s and Australian Pharmaceutical Manufacturers, which are said to be leading suppliers of contract manufacturing services in the country for home care, personal care, health and wellness verticals.
The contract manufacturing business delivered an EBITDA of $25 million at revenues of $372 million in the financial year 2019. It is believed that the company’s long-term success would depend on improvement in its core packaging business.
On 14 February 2020, PGH last traded at $2.570, down 0.772% from the previous close.
