Duratec (ASX: DUR) downgrades revenue guidance for FY24 amid delay in project awards

Highlights

• Duratec is an ASX-listed company which offers refurbishment, remediation, protection and assessment services for infrastructure assets
• In 1HFY24, DUR’s revenue went up by 28% YoY to AUD 292.7 million
• Ertech Holdings Pty. Ltd. has the highest stake in firm with a shareholding of around 19.60%

Duratec Limited (ASX:DUR) is an Australia-based contractor offering refurbishment, remediation, protection, and assessment services for a wide range of infrastructure and capital assets. Headquartered in Western Australia, the company combines multi-disciplinary capabilities in engineering and project delivery, utilizing various in-house assessment technologies.

In the financial year 2023 (FY23), DUR's revenue surged by 58.6% year-on-year (YoY) to AUD 491.80 million. The period saw a 158.5% YoY rise in EBITDA to AUD 35.96 million, a 147.4% YoY increase in net income to AUD 19.20 million, and a 10.1% YoY growth in net cash to AUD 47.86 million.

Key Financial Metrics of 1HFY24

In the first half of the financial year 2024 (1HFY24), DUR's revenue increased by 28% YoY to AUD 292.7 million, driven by higher revenue in the building & facades, mining & industrial, and defence segments. EBITDA rose by 48% YoY to AUD 23.9 million, and NPAT (Net Profit After Tax) increased by 56% YoY to AUD 12.2 million.

Increase in DUR's Tender Activity

As of 20 May 2024, the company’s order book stood at AUD 377 million. The firm secured small to medium-term contracts and annuity-style projects in line with historical win rates. DUR's pre-contracts team is consistently improving the work pipeline. Since the release of the half-yearly results for FY24, tender activity has increased by 40%, reaching AUD 1.47 billion. Additionally, the pipeline has seen a significant jump, now standing at AUD 3.95 billion.

Top 10 Shareholders of DUR

The top 10 shareholders of DUR hold approximately 54.80% of the company's shares. Ertech Holdings Pty. Ltd. and Christopher John Oates have maximum stakes, with shareholdings of nearly 19.60% and 9.64%, respectively.

Outlook

The company has downgraded its outlook for FY24. DUR now expects to deliver revenue of AUD 550-565 million in FY24, adjusted from the previous forecast of AUD 570-610 million, due to delays in expected project awards. The expected range of EBITDA is AUD 46-48 million, adjusted from the previous range of AUD 45-52 million. Despite these updates, the order book remains steady, and the number of tender opportunities continues to increase.  

Share performance of DUR

DUR shares closed 0.78% higher at AUD 1.30 apiece on 24 July 2024. In the last one year, DUR’s share price has increased by 4.84% and in the last three months, share price has jumped 22.64%.

52-week high of DUR is AUD 1.72, recorded on 8 January 2024 and 52-week low is AUD 0.96, recorded on 26 April 2024.

DUR Daily Technical Chart, Source: REFINITIV

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, and currency, is 24 July 2024. The reference data in this report has been partly sourced from REFINITIV.

Disclaimer

This article has been prepared by Kalkine Media, echoed on the website kalkinemedia.com/au and associated pages, based on the information obtained and collated from the subscription reports prepared by Kalkine Pty. Ltd. [ABN 34 154 808 312; AFSL no. 425376] on Kalkine.com.au (and associated pages). The principal purpose of the content is to provide factual information only for educational purposes. None of the content in this article, including any news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations, and video is or is intended to be, advisory in nature. The content does not contain or imply any recommendation or opinion intended to influence your financial decisions, including but not limited to, in respect of any particular security, transaction, or investment strategy, and must not be relied upon by you as such. The content is provided without any express or implied warranties of any kind. Kalkine Media, and its related bodies corporate, agents, and employees (Kalkine Group) cannot and do not warrant the accuracy, completeness, timeliness, merchantability, or fitness for a particular purpose of the content or the website, and to the extent permitted by law, Kalkine Group hereby disclaims any and all such express or implied warranties. Kalkine Group shall NOT be held liable for any investment or trading losses you may incur by using the information shared on our website.