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Downer EDI Ltd (ASX: DOW) shares captured attention on Wednesday, closing at notable increase of 11.14% to AU$4.79 as of the latest update.
Highlights of ASX 200 Stock Report
Investors are making a rush to acquire shares of this integrated services provider, driven by the recent release of its half-year results. Let's break down the key points from the ASX 200 stock report:
- Total Revenue: Experienced a slight decrease of 1.9% to $6 billion.
- Underlying EBITA: Marked a significant uptick of 12.6% to $150.5 million.
- Underlying NPATA: Demonstrated solid growth, rising by 11.9% to $76.1 million.
- Statutory Profit After Tax: Recorded a commendable increase of 5.9% to $72.1 million.
- Interim Dividend: Saw a substantial rise of 20% to 6 cents per share.
Half-Year Performance Overview
During the six months ending on December 31, the ASX 200 stock managed to return to profitability, showcasing a noteworthy 5.9% surge in statutory profit after tax, reaching AU$72.1 million. This positive outcome is particularly impressive considering a 1.9% decline in revenue during the same period.
Management attributes this turnaround to the recovery in earnings from the Utilities business, vs the loss in previous year. Additionally, enhanced performance in the Projects business in NZ contributed to this positive trajectory.
In response to this rebound, the Downer board decided to increase the interim dividend by a substantial 20% to 6 cents per share. This decision reflects a confident 58% payout ratio.
CEO Peter Tompkins expressed satisfaction with the half-year results, stating:
Outlook and Future Prospects
While no specific guidance was provided for the full year, management emphasized the significance of FY24 in the company's turnaround program. The positive note is that Downer anticipates a continued improvement in EBITA margin percentage throughout H2. This improvement is expected to result from a combination of cost-cutting measures and enhanced operational performance, aiming to achieve a margin of >4.5% in FY25.
