The Wagners Holding Company Ltd (ASX: WGN) share price jumped 8% yesterday after reporting its FY21 half-year result.
Wagners is a diversified Australian construction materials and services provider. It produces cement, concrete, aggregates and composite products. It offers a 'Earth friendly concrete' product and it also provides transport services, precast concrete and reinforcing steel.
What did Wagners report in the FY21 half-year result?
The building products business reported that total revenue increased by 26.9% to $155.8 million. Wagners said that revenue increased due to improved transport, quarry, concrete and cement sales.
There was a 15% increase in crossarm sales offset by lower activity in pedestrian infrastructure, mainly due to COVID-19 delays.
Gross profit went up by 30.9% to $88.1 million. Most types of expenses increased for Wagners in line with increased business activity.
The earnings before interest, tax, depreciation and amortisation (EBITDA) of Wagners more than doubled, rising by 116% to $18.6 million. EBIT soared 415% to $10.3 million.
The EBIT margin improved by 4.1 percentage points to 10.6% in the construction materials and services division, whilst new generation building materials saw a 3.7 percentage points increase in the EBIT margin to 8.8%.
There was an improvement of net profit after tax (NPAT) of $6.2 million, leading to a bottom line profit of $6.1 million.
Wagners reported that it generated $32.4 million of pro forma cash flow from operations, up $43.2 million from the prior corresponding period.
Net debt improved by $21.9 million to $61.1 million, which was helped by the improved operational cashflow from better business performance.
Growth plans
It has invested in automation in Australia and increased capacity for its crossarm production facilities to achieve higher productivity and lower cost of production of the new generation building materials. There has been no growth in the USA with the impact of COVID-19, but the pultrusion machine has arrived in USA and it's also pursuing opportunities with manufacturing from Australia.
Wagners boasted that there has been around 20,000 tonnes of CO2 emissions saved by using Wagners low carbon concreate technology Earth friendly concrete (EFC). it said there is increased demand in UK and Europe. The global regulatory focus on CO2 emissions provides a perfect platform for EFC, according to management.
The company said that there was a significant increase of sales of cement in the first half of FY21, with the market outlook looking promising. Wagners is also expecting increased demand in FY21 for concrete with the commencement of infrastructure projects.
