Should you buy K&S Corporation Ltd?

K&S Corporation Ltd (ASX:KSC) is in a hot sector so it could be one for the watch list.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The transport and logistics sector is hot right now with investors having already witnessed takeover offers for two giants of the industry. Toll Holdings was first to get snapped up by overseas buyer Japan Post and now Asciano Ltd (ASX: AIO) looks set to be acquired by the giant US-based Brookfield.

At the smaller end of the market there remains a handful of transport companies that could all make tidy bolt-on acquisitions for larger peers or indeed be instigators of smaller scale consolidations themselves. It's a sector to watch in this low growth and low interest rate economy, as merger and acquisition (M&A) activity is bound to heat up.

One stock that could find itself involved in future M&A activity is the $150 million K&S Corporation Ltd (ASX: KSC).

The group just reported solid full year results, here are the key results:

  • Operating revenue increased 19.3% to $699.2 million
  • Underlying profit before tax of $18.2 million
  • Earnings per share of 11.4 cents
  • Net debt of $98.1 million
  • Net tangible assets at June 30 stood at $1.73 compared with the current share price of $1.26
  • The performance of the New Zealand business was extremely strong with both revenue and underlying profit up. Similarly solid performance is expected in the current year.

Outlook:

Organic revenue growth was impressive during FY 2015 and work won is set to flow into FY 2016 at a rate in excess of $63 million annualised.

A dividend of 3.5 cents per share (cps) has been declared. The stock will trade ex-dividend on October 15 and payment will occur on November 2. Coupled with the interim dividend – also 3.5 cps – and the stock has a yield of 5.5%.

Motley Fool contributor Tim McArthur has no position in any stocks mentioned. 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.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »