Agreed that their tender pipeline looks good, and that the Federal Election would have delayed some contract awards, however I personally feel that I would rather wait until they report in August for the FY25 full year before making a decision on whether to buy back in to DUR. Maybe even wait a bit longer than that until they're actually in an upgrade cycle instead of a downgrade cycle.
I say this because I have seen with other companies in similar positions that they can go lower before they recover.
On May 23rd they said: Revenue guidance has been revised downward to a range of $570m - $585m from $600m - $640m. EBITDA guidance has been adjusted to a range of $50m - $53m from $52m to $56m previously. The guidance is based upon the earnings from year-to-date work delivered plus the Company’s forward forecast assumptions of the earnings from current works expected to be delivered by the end of the financial year. In FY24, the Company reported revenue of $555.8m and EBITDA of $47.6m.
--- end of quote ---
So the new midpoints of both revenue and EBITDA guidance are below the bottom end of the previous guidance range. Note the bit about this revised guidance being based on forecast assumptions relating to work that they expect to complete by June 30, so it's not locked in yet.
On the plus side, if they manage to report FY25 Revenue and Earnings within those new guidance ranges, that will be higher than FY24 so will mean they have achieved revenue and earnings growth in FY25, just not as much growth as previously expected.
On the basis that the first downgrade is often not the last, and that they still need to complete some work and get invoices out for that work by June 30 to hit this new guidance, I think there's still capacity for them to underwhelm with their results in August, or have one more downgrade between now and then.
At some point they will be a clear buy again but I'm prepared to wait until they're in an upgrade cycle before buying back in, even if that means missing the bottom and a little of the rebound.
Disc: Not currently holding DUR. Have done in prior years and made money from holding them. I do like the company, but I'm choosing to stay on the sidelines with them right now.
