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Wagners Holding Company Limited (ASX: WGN), a company from the materials sector which is into the business of production and sale of the construction material announced its trading update on 22 January 2019.
The company highlights an update regarding the EBIT for the first half of the FY2019 which ended on 31 December 2018. As per the guidance report of the company which released on 1 November 2018, the company had expectations that the results obtained in the first half of FY2019 will be similar to the results of the second half of FY2018. However, the first half-yearly results were lower than its previous corresponding period of 2018. The unaudited EBIT for the first half of FY2019 is $15.9 million.Â
In the AGM held on 1 November 2018, the company expected that its overall performance would be approximately near to FY2018 EBIT of $39.5 million. Based on the current performance, the company now expects that its full-year earning by the end of 30 June 2019 will be in the range of $35million to $38million.
During the first half of FY2019, the company made a substantial investment in the business where the main focus of the company was towards its domestic and international growth which are the reasons for its current earnings. The other reasons for the reduced earnings in FY2019 were timings of the project which is yet to start. There was also an increase in the year-on-year depreciation in its capital investment since the company got listed on ASX.
During the period, the company has upgraded its corporate infrastructure regarding the system and key personnel. The company is also well prepared to capitalize its Composite Fibre (CFT) products, Earth Friendly Concrete, and significant construction projects into the domestic and the international market.
The official listing date of WGN on ASX is 8 December 2017 where the performance of the company remains consistently negative. The last one-year performance of WGN was -21.58%.
As per the annual report of Wagners Holding Company Limited, the company made a profit of $24.807 million. The balance sheet of WGN shows that it has a net asset base of $59.302 million. However, its total liabilities are much ahead of its total shareholdersâ equity which means that during the period, the company took external financial support in the form of debt for meeting its financial requirement. An increased debt to equity ratio indicates a situation of risk. The position of the total current asset and the total current liabilities indicates that the company will somehow manage its working capital needs and might struggle in clearing its short-term debt. The total shareholdersâ equity is $59.302 million.
By the end of the FY2018, WGN had net cash and cash equivalent of only A$1.500 million.
By the end of the trading on 22 January 2019, the closing price of the WGN share on ASX was A$2.730 which is 0.250 points below its previous trading dayâs closing price with the stock holding a market capitalization of A$480.9 million and PE ratio of 17.43x.
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