Mayfield Board doubles the amount of the final dividend 

19 July 2024

Important bits of commentary/points

1. Fully franked final dividend of 2 cents per share
2. Robust business operations have continued to yield strong performance, leading to an unaudited cash reserve of $16.3 million as of 30 June 2024"

Cash on hand at end of the HY (December 2023) stood at $8.7m meaning the company generated $7.6m of cash flow in the 2nd half (assuming the increase is NOT because of debt and/or significant changes in working capital)

Lets assume the cash flow is legit (generated by the business). Impressive for a company with a market cap of $84m

Who is Mayfield Group:

Manufacturer of switchboards, transportable switchrooms and electrical protection panels

Provides telecommunications and power quality solutions and services and maintenance services of electrical and telecommunication infrastructure.

Within the company's HY report in February a couple of interesting bits of commentary

1. Revenue decreased from the previous period because of a deliberate focus on manufacturing opportunities that offer higher profit margins.
2. Our manufacturing operations in Henderson, WA, are experiencing promising growth due to increasing demand.
3. We have planned further investments to enhance our capacity in the second half of 2024 and in 2025

After reading point number 3, I fully expected the market would be disappointed with the company's FY24 results because of the 'further investments' that would translate to higher costs and decrease profits.

However, the company released a dividend update on 19 July that highlights the tailwinds behind the company and my pessimism behind the Fy24 results might be mislaid.

*All following numbers/metrics via Finchat*

At a share price of 92c the company has a market cap of $84m and a PE ratio of 10 with TTM revenue $74.5m, gross margins of 53%, NPAT of $7.2m, OCF of $12m and FCF of $10m