Surprising story

When you begin to look at a company like Bisalloy Steel, you expect to find a rather cyclical story.
Looking at their results during the last 5 years, this is much more a regular growth story.

This is also confirmed by a beta of - 0.32 (source : yahoo finance).
Something you'd expect from a defensive stock, not from a stock supposed to be cyclical and related to defence.

Their FY 25 results were quite impressive.
Despite no growth for their revenues, they were able to increase their NPAT by 24 %.
It illustrates well what the company was saying : " the highlight this past year has been the further diversification of our earnings".
As the company was able to offset the weakness of nickel and iron production, by higher gold prices and increased defence demand.

The company explained quite well its margin increase :
- despite slightly lower volumes, they increased average prices due to higher share of Armour and Protection steel,
- while they improved input costs in H2 (lower power and transport costs).

Despite the growth of the share price during the last few years, the valuation does not seem to reflect such a story with a PE 25 of 13.5 and a free cash flow yield of 7.5 % (excluding the impact of working capital).
Perhaps partly explained by the cautious guidance the company gave for FY 26 (due to one off in FY 25, that the company did not quantify if I am not wrong).
Despite their cautious guidance, they increased the final dividend 25 by 43.5 %, which gives a positive message to the market.

The company is not only generating a high level of free cash flow, but it is also redistributing a large part of the profit to its shareholders (payout of 89 % in FY 23 and 98 % in FY 24), while investing in new businesses (cf development of Optiwear sensor).

A bit frustrating that they did not give a breakdown of revenue and margins between their main businesses (just a geographic breakdown).