Have been looking into STS performance over the past couple of...

Have been looking into STS performance over the past couple of years, as well as forecasts / guidance issued in latest update and things may not be as bad as indicated by SP.

Revenue NPBT
FY09 1st Half 176.1m 7.1m
FY09 2nd Half 143.1m 2.1m
FY10 1st Half 130m (5.5m)
FY10 2nd Half (f) ? 5.5m 8.5m

FY10 1st Half includes loss of 8.8m for Framework Business and unreported amounts in dispute of 5.6m. Excluding the Framework Business loss the NPBT would have been 3.3m and taking into account the amount in dispute it would have been 8.9m (a similar level to what they are forecasting for the second half of FY10.

Taking into account the above, STS could be looking at a NPBT of around 13 18m for FY11 (a similar level to the 2008 NPBT when STS was trading at over 3.00 per share).
Work in hand at November was 193m and STS is now more diversified and also has a lower risk profile (less dependency on certain clients / industries). I recall the highest level of work on hand they have announced was 210m in August 2008 - a level they are not far away now. And in 2008 they made a NPBT of around 20m.

Work on hand as at June 09 was 139m, meaning they have secured additional work of 54m in 4 months a very good result (especially given the Framework Business is being divested).

Clearly there have been a number of issues, management have not managed certain areas of the business to a level acceptable to shareholders, however I believe STS still has significant potential provided they can complete the turn around (just look back over the past 5 years to see they have done this previously). The forecasts and work on hand indicate a return to profit levels similar to those reported in 2008.