Neptune Marine Services Limited (ASX: NMS) mainly operates in two segments; Offshore Services and Engineering Services. The company has a presence in Australia, South East Asia and the UK. The Offshore Services division provides services to the oil and gas, marine and associated industries. Specialised services of the division offer commercial diving, inspection, repair and maintenance, support, etc.
The Engineering Services division offers services to the industries such as oil and gas, marine, renewable energy and associated industries. Specialised services include subsea and pipeline engineering, fabrication, assembly and testing, refurbishment, installation, maintenance, etc.
The group reported revenues of $84.4 million in FY19, an increase of ~25% (Y-o-Y) on the back of strong growth posted by Offshore Services. Looking at the segment performance, Engineering recorded a growth of 26.12% in FY18 to $23 million as compared to $18 million in the previous year. Offshore Services recorded a higher growth of 42.79% to $98 million and supported the overall sales growth in FY19. Correspondingly, the group’s gross margins improved from 15% to 20%.
On Geographical basis, Australia, domicile for the company recorded the highest revenue growth of 47% to $56.99 million. Asia and the Middle East posted a de-growth in revenue coming in at -26%. Revenue from the UK also saw exuberant growth of 25% in FY19.
Business operating expenses were ~12% down as compared to FY18 and led the overall operating expenses to support the bottom line. Overall, NMS reduced its losses from $29.9 million in FY18 to $3.1 million in FY19. Impairments of goodwill amount to $~13 million and income tax expenses of $5.65 million led the overall losses in FY18. Segment-wise, Offshore Services witnessed a significant reduction in losses in FY19, whereas Engineering segment remained profitable with substantial improvement of $0.566 million in FY19 as compared to $0.125 million in FY18.
The company recorded net operating cash inflows of $5.38 million in FY19 as compared to a net operating cash outflow of $4.19 million in FY18. The company’s overall cash position improved significantly from $6 million in FY18 to $ 12.83 million in FY19.
There were no changes in Contributed Equity in FY19 from $273.54 million in FY18. The accumulated losses for the company as on 31st March 2019, stood at $233.26 million in FY19 as compared to $230.15 million in FY18. Total reserves for the company remained negative at $14.120 million in FY19, with minor changes from $14.829 million in FY18. Overall, total equity in FY19 stood at $26.163 million, lower from $28.558 million in FY18.
Total current assets on the balance sheet grew 54% to $37.63 million. However, total current liabilities grew at a much higher rate of 113%, mainly on account of ‘Trade and other Payables’. As a net effect, net current assets as on 31st March 2019, were 5% down as compared to the previous corresponding year. With total non-current assets of $15.03 million, total assets increased to $52.66 million in FY19 from $41.18 million in FY18.
On 14th May 2019, the stock closed the day’s trade at $0.250 up 2.041% as compared to its previous closing price.
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