Well boys (hots and wrongway in particular) we would have to be quite happy with the half yearly released tonight. On a prospective PE of well below ten,barely trading above NTA and great growth prospects. Hopefully for our sakes as holders (one of us has to be in the Top 20!! lol) the market will wake up to this little gem. See below.
PCH Group Ltd (ASX: PCG) today confirmed continued growth in earnings by delivering a net profit before tax for the six months ended 31 December 2002 of $2.04 million, an increase, of 350% over the same, period last year. Net profit after tax was up $273% to $1.36 million and an EBITDA figure of $2.9 million was recorded.
The big increase in the Company's bottom line was driven by surging revenues, which increased from $6 million in the previous corresponding period to $16 million in the current period.
"Our results reflect improving activity levels across all sectors of our business", said Mr James Cullen, PCH Group Managing Director. "Importantly, these conditions are expected to continue and we believe the best is yet to come. Our order book, utilisation levels and enquiry rates all continue to grow and we are on track for a good full year result" he said.
The growth outlook for PCH is particularly strong in the Australian resources sector and the Caspian oilfields where PCH has secured strong footholds, with key blue chip contracts already in hand. Mr Cullen said that in both of these sectors there was ample evidence of robust activity levels continuing for at least the next four to five years and PCH was in an excellent position to further capitalise on its established position in those markets.
In addition, quality maintenance opportunities were also becoming available, as evidenced by the recent award of a two year contract at BHP's HBI plant and the renewal of the North West Shelf scaffolding maintenance contract.
Mr Cullen said that the return to buoyant conditions and improved performance endorsed the strategy that PCH put in place following the divestment of Finn International in 2001. "As well as now being positioned to achieve further leverage from improving market conditions, we have also diversified the business into unrelated geographical sectors and at the same time cut our cost structure and reduced debit" he said. "The full benefits of this is strategy are now starting to 'flow through."
PCH's balance sheet reflected its strongest ever net tangible asset position, at approximately $17 million. Net borrowings stood at approximately $4 million at the end of the half-year, representing a gearing ratio of 23%. This was lower than forecast and reflects strong operating cash flows of $3.2 million for the six months.
In addition to geographical diversification, the Company has achieved further cyclical risk reduction by penetrating various market sectors. "Whilst the Australian resources and international oil & gas sectors will be key drivers for us, we are also doing very well in the Perth residential and NSW high rise markets" Mr Cullen said.
"In Sydney, we are currently a small but growing player, We have had an excellent reception since entering that market and have captured a number of key clients and projects, such as the Walsh Bay redevelopment, the Sebel Apartments and more recently the Ikon Apartments. We have had to turn down work lately due to stock shortages, so clearly ibis is a market where we can achieve sensible and measured growth."
The two storey residential market remains buoyant, with current conditions being driven by low interest rates and smaller block sizes. The drop in housing approvals, which is partly related to changes in the Federal Government's first home buyer grant, is expected to have little effect on the two storey market in which PCH operates.
The Directors of PCH expect the strong resurgence in market conditions and profitability to continue for the foreseeable future. These market conditions will continue to generate quality opportunities for the Company, which, supported by a healthy balance sheet, strong operating cash flow and low debt, is poised to achieve record results for shareholders in the years ahead.
For further information contact: James Cullen MANAGING DIRECTOR (08) 9248-9000
MORE TO FOLLOW
PCG Price at posting:
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