Results out today from engineering and construction company RCR Tomlinson Limited (ASX: RCR) suggest the company is still struggling with falling work in the sector.
RCR reported a net profit after tax of $39.1 million for the full 2015 financial year, which although down 9.7% on the previous year doesn’t appear to be a bad result, given revenues fell 13% from $1,300.5 million to $1,129.5 million.
Here’s the nitty gritty:
- Revenues: Down 13% to $1,129.6m
- Net profit after tax: Down 9.7% to $39.1 million
- Earnings per share: 28.2 cents
- Full year dividend: 11 cents (10% above last year)
- Dividend Yield: 6.4% fully franked
- Net Debt: $12.2 million (Down 79%. Total Debt $61m, Cash of $49.2m)
- Operating cash flow: $32.8m
What the company didn’t make clear was that the one-off sale of property, plant and equipment delivered a net gain of $16.4 million, which should really be excluded from underlying net profit.
The good news is that the contractor now has more than $1 billion in work in hand, and has diversified into infrastructure and the energy sectors, as well as its largest earner, resources. A recent acquisition adds work in the water sector too.
RCR Tomlinson could be one of the better stocks in the mining services/construction and engineering sector to watch. But just be aware of one-offs that could pump up profits – for that, the company gains a black mark in my books.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of February 15th 2021
Motley Fool contributor Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga
The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
- Why PWR Holdings Ltd could see its share price rise from here – July 21, 2017 12:11pm
- Fortescue Metals Group Limited share price sinks on native title decision – July 20, 2017 4:23pm
- 5 overlooked finance shares to add to your watchlist – July 20, 2017 2:33pm