Whilst overall revenue was down by 23% (and we know the problems in projects going to care and maintenance), NPAT/Rev was up from 4.99% to 7.35%
Dig a bit deeper into the segments & there is an underlying positive.
Revenue in the Oil & Gas segment actually increased its revenue by 21.8% AND also increased its NPBT/Rev from 5.2% to 9%. This is growing into a serious, profitable business in its own right.
Yes, revenue from the Mineral Processing was off significantly (actually down by 28.9%) - and yet, it increased its NPBT by some $2.63m – read it this way, NPBT up by 7.2% when rev is down by nearly 29%. That’s a mighty effort under the circumstances.
I think the O&G division will power ahead in FY25 and deliver Rev of around $85m and assuming the same margin NPBT of 9% that equals $7.6m
The MP division is more problematical – given it is dependent upon project ‘green lights’ but the company isn’t short on confidence. Here are a few excerpts from the FY24 AFR:
"Based on the pipeline and the high levels of study work, GR Engineering’s medium to long term visibility for project work remains high. At 30 June 2024, GR Engineering was engaged on 23 studies across a broad range of commodities for projects both in Australia and abroad"
Clearly, the projects are there and so this is purely a timing matter. The worst-case scenario is that we bring in no new projects and have to work through the existing contracts (Mungari Future Growth Project, Kainantu Gold Project and Kathleen Valley Lithium Backfill Project). This would also mean working off the ‘contract liabilities’ (see note 18) of $45m – basically this is cash we have received but have yet to do the work. That said, we have the cash facilities of some $75m, an excess of receivables over payables of some $18m and we are debt free. FY25 could be the year where we pay a partial penalty for a robust past few years.
Overall as @Bear77 has so correctly enunciated, this is a great company, extremely well managed and with good skin in the game. I am a holder, I think this cycle still has some legs.