Korvest's Promising Outlook for FY25: Record Order Book and Profit Growth
KORVEST LTD (KOV) Share Update December 2024 Monday 9th
Korvest Projects Record Order Book for Second Half of FY25
Korvest Ltd has announced a promising outlook for the second half of FY25, driven by a record order book and anticipated profit growth.
Instant Summary:
- Record order book expected for the second half of FY25.
- Significant increase in project work value anticipated.
- FY25 full-year profit expected to exceed FY24.
- First half FY25 revenue similar to FY24, with lower margins.
- 17-day production loss in galvanising business due to maintenance.
Record Order Book and Profit Growth
Korvest Ltd has reported a positive trading update, indicating a significant increase in the value of project work for the second half of FY25. The company attributes this growth to advice from major project customers regarding delivery schedules. As a result, Korvest is entering the second half of the financial year with a record order book, which is expected to contribute substantially to the company's overall financial performance.
While the precise timing of deliveries remains uncertain, Korvest is confident that its full-year FY25 profit will exceed that of FY24. This optimism is based on current delivery schedules advised by customers.
First Half Performance and Challenges
Korvest has maintained its guidance that the first half of FY25 will see revenue levels similar to the first half of FY24. However, the company anticipates lower margins due to project phasing and competitive pressures in the day-to-day market, which are expected to impact the first half net profit.
Additionally, the company faced a significant challenge in November with a 17-day production loss in its galvanising business due to a major unplanned maintenance shutdown. Production resumed on December 1, 2024, and the costs related to rectification are expected to be reflected in the company's first-half results. Some recovery is anticipated from insurers, likely post balance sheet close.
The announcement of a record order book and anticipated profit growth is likely to positively impact Korvest's stock price. Investors may view the company's strong project pipeline and expected financial performance as indicators of robust future growth. However, the production loss in the galvanising business could temper some of the optimism, depending on the extent of insurance recovery.
Investor Reaction:
Analysts are likely to react positively to Korvest's announcement of a record order book and anticipated profit growth. However, they may express caution regarding the impact of the galvanising business's production loss and the uncertainty surrounding the precise timing of project deliveries.
Conclusion:
Investors should closely monitor Korvest's progress in the second half of FY25, particularly regarding the delivery schedules and financial performance. The company's ability to manage competitive pressures and production challenges will be key to maintaining investor confidence.