Korvest (KOV) H1 2025 earnings summary

Executive summary

• 1H FY25 impacted by $670k one-off costs from galvanising operational issue and engineering claim, resulting in margin contraction and lower profitability compared to 1H FY24.

• Record order book driven by two new major projects, with significant increase in major project work expected in 2H FY25.

• Full year FY25 profit is expected to exceed FY24, supported by improved day-to-day and small project orders.

• Interim dividend of 25c per share, fully franked, maintained; final dividend paid was 40c per share, up from 35c.

Financial highlights

• 1H FY25 sales were $51.13m, down 1.1% year-over-year; EBIT $5.78m, down 29.3%; NPAT $4.09m, down 28.5%; EPS 34.8c, down 29.1%.

• Operating cash flow strong at $7.12m, up from $6.88m in 1H FY24.

• Capital expenditure $2.1m, focused on roll forming, transport fleet, and maintenance.

• Margin contraction and project phasing, plus $670k in one-off costs, impacted profitability.

• Record order book at period end.

Outlook and guidance

• Entering 2H FY25 with record order book due to two major infrastructure projects.

• Major project schedules indicate significant increase in 2H activity; full year FY25 profit expected to exceed FY24.

• Usual pipeline of small project and day-to-day work expected to continue.

• Working capital levels likely to rise with project commencements; day-to-day and project markets expected to remain strong, subject to economic conditions.