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Saunders International (ASX:SND) races past revenue milestone, triples net profit in FY21

Highlights

  • Saunders International has delivered strong financial performance for FY21.
  • Revenue crossed the AU$100 million milestone, while net profit jumped 338% and earnings per share improved to 5.36 cents.
  • The Company also diversified its business with the strategic acquisition of PlanetWeave Technologies.
  • At FY21 end, the Company had an order book of AU$83 million.

Saunders International Limited (ASX:SND) is celebrating 70 years of innovation, having delivered cost-effective solutions to its varied clientele. The Company provides high-quality engineered solutions across the complete asset life cycle.

The multi-disciplined engineering and construction company recently released its exceptional annual report for FY21. Although Saunders faced challenges due to COVID-19 for most part of FY21, revenues and net profit after tax grew 52.2% and 338% year-on-year, respectively.

Also, the management team’s focus on cash flow and working capital led to an operating cash flow of AU$15.5 million and a year-end cash balance of AU$23.8 million. Backed by its strong financial footing, the Company has declared a total dividend of 2.5 cents per share for FY21.

Related read: What are the pockets of opportunities for Saunders International (ASX:SND) in the mining industry?

Record revenue, earnings tripled

Saunders delivered a record revenue performance, surpassing the AU$100 million milestone with revenue hitting AU$101.2 million in FY21. This growth has been attributed to a combination of strong operational execution of projects and increased opportunities from the markets where the Company operates.

Image source: SND update, 27 August 2021

Bolstered by strong leadership, the Company managed to gallop ahead on a high-growth path in the face of COVID-19-induced uncertainties, leading to a three-fold increase in earnings. Net profit after tax grew from AU$1.3 million in FY20 to AU$5.5 million in FY21. EBITDA stood at AU$10.1 million, an improvement of AU$6.7 million or 197.1% from the same period a year ago.

The Board has declared a fully franked final dividend of 0.75 cents per share and a fully franked special dividend of one cent per share. The shareholders will receive both dividends on 11 October 2021 with record date of 15 September 2021.  

Good read: What soaring crude oil prices mean for Saunders International (ASX:SND)

Commenting on the upbeat performance, Mark Benson, CEO of Saunders International, stated that the Group continues to improve its systems and processes, and the results demonstrate the disciplined approach built over the past few years. Additionally, the executive leadership team has been enhanced to support forecast growth.  

“The foundations that are now in place will ensure that the Group is well positioned to take advantage of the upcoming market opportunities across our key sectors,” Benson added.   

Read here: Saunders International (ASX:SND) at vantage point amid robust infrastructure spending

Business outlook

Saunders has not provided any earnings guidance for FY22 in light of the current COVID-19 situation and its impact to current and future projects. At the end of FY21, the Company had an order book worth AU$83.34 million. Meanwhile, the Company expects robust market conditions in key sectors, including fuel storage, infrastructure, and defence.

The Government of Australia has issued grants under the AU$260 million Boosting Australia’s Diesel Storage program. Saunders will actively pursue the projects when opportunities hit the market.

Meanwhile, the federal and state governments have beefed up the expenditure on public infrastructure. The NSW government, under its Replacing Country Bridge program, has allocated a budget of AU$500 million for new bridges for the next three years.

Tendering activities continue to heat up in the defence sector and are expected to grow further over the next five years, thereby providing ample opportunities for the company. Tendering activity indicates that live tenders are valued at AU$490 million, while there is a pipeline of tenders worth AU$313 million.  

To generate new opportunities and add new revenue streams, Saunders recently acquired PlanetWeave Technologies, which is a leading provider of industrial process automation and electrical solutions. With the acquisition, Saunders will be able to deliver technical services to its clients, marking its presence in the realm of cyber security and IT-related technologies and solutions.    

Related read: Saunders International acquires PlantWeave Technologies, diversifies into technology-based infrastructure

Share price

SND shares last traded at AU$0.79 on 31 August 2021. The Company has a market cap of AU$83.18 million.

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