Why Is Cardno’s Stock On A Nosedive?

Cardno Limited (ASX:CDD) witnessed its stock price plunging by 3% on October 12, 2018 (3:30 PM AEST) while the group had given a daily buy-back notice. The group lately revealed about its presentation given at the conference organized by Morgans, Queensland. CDD has discussed four topics which included company information, performance overview, detailed overview of the financial reports and its outlook.

Cardno Limited (ASX:CDD), a global provider of combined professional services to the community, reported a strong EBITDA growth to A$ 56.2 million (28%) as compared to the prior corresponding period. EBITDA/CFO ratio comes around 95%. This proves beneficial to the investors as it helps in evaluating companies and performance and checks operating performance of the company regardless of the capital structure of the company. Company shows a strong balance sheet with its net debt/EBITDA of 0.3x indicating the company’s ability to lower down its debt. In H2, the restructuring of APAC division was done to increase opportunities in revenues and collaboration across regions. It was noted in Q4 that the PPI (public private partnership) had made profits and is expected to continue this trend. The LATAM projects which were brought nearly to close are showing consistent performance as per the expectations of the management. There was a growth of 9.7% in backlogs. Company is now looking forward with the key focus where all divisions return to organic growth, the EBITDA margin increases at all divisions, and the group makes considerable business development investment. For the better client service company is planning to make considerable IT/divisional investment and this might also increase the productivity. [optin-monster-shortcode id="wxhmli4jjedneglg1trq"]

Company also presents the 2018 highlights of the financial performance. Gross revenue was reported as A$ 1,117 million which is down by 5.5% as compared to prior year. EBITDA is reported to go up 27.7% as compared to the prior year. Net operating profit after cash tax paid has gone up by 66.3%.Net cash flow from operations has gone up by 1302.6%. The net operating profit after cash is paid from its continuing operations is A$ 33.4 million. Net loss made after tax was A$ 14 million. The company has total assets worth A$ 837.046 million with total liabilities worth A$ 303.838 million showing company’s capacity to clear its long-term obligations. The current asset of the company is A$372.124 million corresponding to current liabilities with A$ 203.791 million which states the company is in position to pay its short-term obligations. The interest coverage ratio is 16.3x. Company has used A$ 45.702 million primarily to reduce debts, and manage buy back of shares, and it acquired 2 small bolt acquisitions. Company’s outlook for year 2019 will remain to be business improvement with the focus to have control on cash, invest in people, and grow organically.

Throughout the journey of the company the stock performance remains negative showing result of -39.56%. The first year reported a movement of -15.11% in price, and 5 years and 10 years in terms of stock price movement showed a drop of 66.73% and 41.55%, respectively.

The company’s share price traded at A$ 1.135 with market capitalization of A$ 534.65 million. The price movement of the share states that the moving average convergence and divergence (MACD) line is below the signal line.

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