Matrix Composites & Engineering: Results trumps potential

Matrix Composites and Engineering Limited (ASX:MCE) announced on Wednesday 21st December 2011, that it had been awarded a cooperation agreement  by a leading European oil services company potentially worth $35-$50m in revenue per year for the next five years.

Matrix is involved in the design, manufacturer and service of engineered products using advanced composite and polymer materials for use in the oil and gas and resources industries. It is the global leader in the manufacturer of riser buoyancy modules, and the only major company in Australia that manufactures and exports equipment for the oil and gas industry.

Matrix shares initially jumped 5 per cent higher before settling at $3.05, still a far cry from their peak of over $9 earlier this year. The agreement comes on top of their announcement on 17th November of $61m in new contracts.

The company stated that it will be working on new riser buoyancy modules to be used in 15,000 feet of water which is the greatest depth that these modules have ever been used.

Matrix’s new Henderson plant has a 7500PSI deep water simulation chamber which is the largest of its type in the world and can test buoyancy systems to a service depth of 17,500 feet which can easily accommodate the depths required by the client.

That the share price hardly moved on this news shows the market is still wary of the company’s performance and is waiting for further announcements. My sentiments exactly. Whilst potential is good, results is what eventually will drive the share price forward.

Are you looking for quality stock ideas? Readers can click here to request a new free report titled The Motley Fool’s Top Stock For 2012.

More reading

3 ASX shares for stormy markets

5 Safe haven ASX stocks for 2012

Motley Fool contributor Mike King owns shares in Matrix. The Motley Fool’s purpose is to educate, amuse and enrich investors. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Click here to be enlightened by The Motley Fool’s disclosure policy.


Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.

Enter your email below to discover the name, code and a full investment analysis in our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2016.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our">Financial Services Guide (FSG) for more information.