To add to @SudMav’s results straw a few days ago, Cosol also provided a business update and 1H25 guidance (see announcement below). I thought the guidance looked quite positive. Management are expecting revenue growth of 17% to 20%, and EBITDA growth of 17% to 25% underlying EBITDA margin for the first half to be in the range of 14.1% to 14.7%. Seasonally the first half EBITDA margin is lower than the overall year. The shares are trading at just over 15 times FY25 forecast earnings, which doesn’t look expensive given earnings have been growing at over 20% per year, and this is likely to continue. ROE is likely to be c. 17% going forward.
Someone out there either doubts the guidance or was expecting a lot more from Cosol, because the share price fell over 8% today to a 12 month low of 83 cps. I’ve had COS on my watchlist for over a year now and I took the opportunity today to take a starting position IRL at 85 cps. I will most likely add if the share price weakens further.
Held IRL (0.4%)
ASX Announcement
Brisbane, 14 November 2024 – COSOL Limited (COSOL, ASX: COS) is pleased to announce it will see strong revenue and profit growth in the first half of FY25 as momentum from the end of FY24 carries through to the current financial year.
Major contract wins and extensions from Q4 FY24 have underpinned strong revenue growth in H1 FY25, locking in a buoyant H1 performance and providing a springboard for continued growth across all key metrics for the full financial year.
COSOL is on track to deliver revenue growth of 17.0% - 20.0% over H1 FY24 and to be in the range of $57.5 to $58.4 million.
First half underlying EBITDA growth is expected to be in the range of 17% to 25%, with underlying EBITDA margin for the first half to be in the range of 14.1% to 14.7%. Seasonally our first half EBITDA margin is lower than the overall year.
COSOL Chairman Geoff Lewis said the Board was pleased that momentum at the end of FY24 had carried through strongly in the 2025 financial year.
“This is testament to COSOL’s investment in deep capability and the manner in which COSOL has been able to demonstrate real benefits for clients in the form of efficiencies and material cost savings,” he said.
“COSOL has consistently delivered 30%+ growth in revenue and EBITDA since listing in 20202. In FY24, we delivered 35% growth in revenue, 33% in underlying EBITDA, and an underlying EBITDA margin of 15.4%.
“This consistent growth means there is a positive predictability to COSOL’s operating performance – and we’ll do it again for the full year FY25.”
First half growth has been driven by key client wins across the Group in Q4 FY24 and early FY25 with organisations such as Horizon Power, Department of Transport in Victoria, QBuild and CleanCo, and extended work with the Department of Defence.
These long-term contracts create further momentum into FY25 and beyond.
In addition, COSOL continued to expand its capabilities in providing end-to-end Asset Management software and solutions with the successful acquisition and integration of AssetOn Group and Core Asset Co.
These strategic acquisitions position COSOL well to deliver a sector-leading Asset Management as a Service offering to our expansive blue chip client base and a platform to win new customers in the asset intensive market.
