The case of Shape is quite interesting. While construction is considered a tough sector, due to the cyclicity of orders and the volatility of margins, Shape is showing steady results since the end of the covid period.
2 main reasons for that : - Shape has an exceptional promoter score (+ 88 in FY 24, after + 84 in FY 23) which allows the company to win half of the orders (when they bid) and have a high level of repeat customers (80 %+ in FY 23 and FY 24), - after a tough initial period following its listing, Shape is now showing a margin increase (from a low level); its margins benefit from a good risk diversification (unlike a lot of construction companies, they mainly have a lot of small orders) and short term orders (which help them better manage any cost increase).
As the company has a low Capex requirement and a negative working capital model, it is able to get a high level of free cash flow, even with an EBITDA margin of only 3.1 %.
