Why the Cimic Group Ltd (ASX:CIM) share price is going nuts

Cimic Group Ltd (ASX: CIM) shares are up 14% at the time of writing after it reported a 12% growth in NPAT to $363 million, but the application of new accounting standards will deliver a 38% hit to total equity.

According to a report in The AFR, Cimic’s application of accounting standard AASB 15 from January 1 saw total equity fall $1.28 billion to $2.1 billion.

According to the report, revenues can only be recognised when it is “highly probable” a reversal will not occur and costs can only be capitalised if they are expected to be recovered.

Cimic reported a cash flow uptick of 17% for the six months to June 30, 2018 with its net cash position at $1.3 billion, revenue growth of 11% and 2018 NPAT guidance of between $720 million and $780 million confirmed.

Stocks in the building materials sector have struggled with a reduction in building approvals across Australia, with CSR Limited (ASX: CSR) shares down 29% from an early May high of $5.74, and Brickworks Limited (ASX: BKW) or James Hardie Industries plc (ASX: JHX) making only small gains.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Brickworks. 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 Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…


The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!