The PWR Holdings Ltd (ASX: PWH) share price is crashing on Friday morning.
At the time of writing, the automotive cooling products provider's shares are down 12% to $10.31.
This follows the release of the company's full year results after the market close on Thursday.
PWR Holdings share price crashes despite record results
- Revenue up 17.8% to $139.4 million
- EBITDA up 15.7% to $45.2 million
- Net profit after tax up 14% to $24.8 million
- Earnings per share up 13.9% to 24.7 cents
- Final dividend up 3.4% to 9.2 cents per share
What happened during the year?
For the 12 months ended 30 June, PWR Holdings reported a 17.8% increase in revenue to a record of $139.4 million. This reflects revenue growth of 14.7% in Australia, 10.6% in the United States of America, and 8.9% in the United Kingdom.
The star of the show for the company was its Emerging Technologies business. Its revenue grew by 57.8% in FY 2024 and now represents 25.1% of group revenue. This is up from 18.7% a year earlier. Management advised that its strong performance was driven largely by a 100% lift in revenue from the aerospace and defence market to $21 million.
PWR Holdings' margins weakened a touch during the 12 months due to investments. This includes increasing its headcount by 67 during the year. Management notes that 21 were added "ahead of the curve" to set up the company for future growth opportunities, particularly in aerospace and defence.
This led to the company posting a 14% increase in net profit after tax to a record of $24.8 million.
In light of this profit growth, the PWR board lifted its final dividend by 3.4% to 9.2 cents per share. This brought its total dividend to 14 cents per share, which is up 12% year on year.
How does this compare to expectations?
According to a note out of Bell Potter, it was forecasting a net profit after tax of $26.8 million. This means PWR Holdings has fallen short of this estimate.
In addition, the broker was forecasting margin expansion in FY 2025. However, management has warned that its margins will be impacted by further investments.
Management commentary
PWR's founding shareholder and managing director, Kees Weel, was pleased with the company's record performance and warned of short term margin pressures. He said:
The full year result reflects a solid performance across all parts of the business which continue to grow and execute well. FY2025 will be a transition year for PWR which is crucial to successfully position us for future growth, as we move to our new headquarters in Stapylton. Margins will be impacted in the near term as we invest ahead of the curve to set us up for the future.
No guidance has been provided for FY 2025.
The PWR Holdings share price remains up 18% over the past 12 months.
