Today, shares of Qube Holdings Ltd (ASX: QUB) fell as much as 5% following the release of its annual profit results earlier in the day. In the year ended 30 June 2015, Qube's revenue grew strongly to $1.45 billion, up 19%, but profits fell to $85.8 million, down 2% year over year.
However, underlying profits per share, which excludes impairments incurred during the year, climbed 7.5% to 10 cents per share.
"We are pleased with Qube's ability to grow underlying earnings per share despite volatile market conditions that impacted several of Qube's key markets and customers," CEO, Maurice James, said.
Qube's Logistics division generated modestly increased profits thanks to its focus on cost reduction and maintaining market share despite the competitive landscape and weather impacts.
The Ports & Bulk business produced a good profit result year over year.
Bucking the trend of the resources sector in recent times, the business secured some new contracts in the oil and gas, and bulk commodities markets and produced a 22% jump in divisional profit.
This came despite some contract endings, and the well-documented restructure of Atlas Iron Limited (ASX: AGO).
The company announced a final dividend of 2.8 cents per share, taking the full-year payout to 5.5 cents – up 8% on last year's payment.
Payable on 7 October 2015, the distribution represents a payout ratio of 55% and is comfortably in-line with the group's target range between 50% and 60%.
Outlook
Looking ahead, Qube says trading and economic conditions are likely to remain "challenging" in the coming year. Excluding any new contracts, it says profits from the Ports & Bulk business will be lower.
However, overall group earnings are expected to benefit from organic growth and benefits from acquisitions made in its 2015 financial year.
Qube says it is continually assessing a broad range of acquisitive and investment opportunities.
Should you buy Qube shares?
Qube is a good business, but I'm not a buyer of its stock today. It appears richly priced at a time when profit growth may slow.
