Oldfields Holdings Limited - Quarterly Activity Report and Financial Update for Q1 FY2025
OLH (OLH) Share Update November 2024 Friday 15th
Oldfields Holdings Reports Strategic Shift and Financial Update for Q1 FY2025
Oldfields Holdings Limited (ASX: OLH) has released its quarterly activity report and financial update for the first quarter of FY2025, highlighting a strategic shift and financial performance improvements.
Instant Summary:
- Strategic shift to focus on sales and distribution, exiting hire and service model on the East Coast.
- Net cash used in operating activities: $1,096K.
- Raised $1.039 million through new share issuance.
- Positive net profit after tax (NPAT) of $157K for Q1 FY2025.
- Projected strong cash inflows from scaffold sales and insurance claims in Q2 FY2025.
Operational Update
In the first quarter of FY2025, Oldfields Holdings initiated a strategic transformation to streamline its operations. The company decided to exit the hire and service model on the East Coast, focusing instead on sales and distribution. This move is expected to enhance operational efficiency and profitability. The transition began in June 2024 and is anticipated to continue impacting financials through Q2 and Q3 FY2025.
The strategic shift has already shown initial benefits, with further acceleration expected in the December quarter. The company is optimistic about its revised structure, which emphasizes sales and distribution, promising improved outcomes.
Financial Update
Oldfields reported a net cash outflow of $1,096K from operating activities in Q1 FY2025. Despite this, the company recorded customer receipts totaling $6.8 million, including $326K from transformation activities. Sales were impacted by a product recall, which limited scaffold inventory availability in Q1 and Q2 FY2025.
Staff costs amounted to $3.5 million, including restructuring expenses, while administration costs were $2.6 million. The company also raised $1.039 million through new share issuance, which helped ease working capital pressures.
Outlook and Future Prospects
Looking ahead, Oldfields anticipates a stronger cash position in Q2 FY2025, with expected inflows from insurance claims and scaffold sales. The company's sales pipeline, valued at over $10 million, reflects strong demand for its products both locally and internationally. A significant order from the US is expected to further boost cash flow in Q3 FY2025.
Oldfields achieved a positive net profit after tax of $157K in Q1 FY2025, marking a significant turnaround from the previous year. This momentum is expected to continue, supported by robust sales of paint and scaffold products.
The strategic shift and financial performance improvements are likely to positively influence Oldfields' stock price. The focus on sales and distribution, coupled with strong sales momentum, could enhance investor confidence. The company's ability to manage cash flow effectively during the transition period will be crucial in maintaining its financial stability.
Investor Reaction:
Analysts are likely to view Oldfields' strategic shift positively, as it aligns with efforts to streamline operations and improve profitability. The successful capital raise and positive net profit after tax are encouraging signs for investors.
Conclusion:
Investors should keep an eye on Oldfields' progress in executing its strategic shift and the impact on financial performance in the coming quarters. The company's ability to capitalize on its sales pipeline and manage cash flow will be key to sustaining its growth trajectory.