2023 General, news, etc, page-76

LYL put out a bullish update for FY23 today. You can access it yourself, but part of it reads:

PERTH, 11 April 2023
Entering the final quarter of FY2023, Lycopodium Limited (“Lycopodium” or the “Company”, is continuing to see a high level of activity across all operating sectors, delivering a robust order book of projects and feasibility studies across a broad geographic footprint. We are also seeing a strong study pipeline which bodes well for the future. This significant level of activity across all sectors of operation continues to translate into healthy financial performance. The Company now provides an updated guidance for the full financial year, with forecast revenue of $320 million and forecast net profit after tax (NPAT) of $45 million.

In resources, the Company remains busy on a host of battery minerals (primarily lithium) projects, including Liontown Resources’ Kathleen Valley Project and Talison Lithium’s Chemical Grade Processing Plant #3 (CGP3) and Mine Services Area Relocation Projects in Western Australia and Leo Lithium’s Goulamina Project in Mali. All three projects are in various stages of construction and are progressing well.

FMD (fustigate me dead – my brother in WA often ejaculates words that sound similar), look at the NPAT/Revenue margin. $45m/$320m = 14.06%. At the commencement of projects LYL tends to create provisions to cover financial risks, and when these are wound back on settlement of the contract, it can occasion large distortions of average profitability for any one year. I am not going to calculate a reasonable multi-year average, but intuitively I suggest that LYL's full-cycle NPAT/Revenue margin is 10%. We NWH shareholders can only drool at the fain hope that NWH may one day get to half that profitability.