Downer EDI's latest results. Key metrics below:

• Underlying NPATA of $261.2m, up 21.4%
• Gearing reduced to 19.0% (35.7% at June 2020)
• Final ordinary dividend 12 cents per share (Full year 21cps – unfranked)

Over the financial year, Downer EDI has sold/divested a number of their "non core" subsidiaries such as those in the mining sector and their laundries interests, to simplify the business and using the proceeds to reduce the debt and share buybacks (a plus). Given their main verticals are Transport, Utilities, Facilities - the prolonged Covid-19 impact is likely to be small. However, the earnings of this business isn't super exciting and hence this wouldn't probably a stock with phenomenal earnings growth YoY. As a service contractor, the risk is having to slash prices to keep winning bids and tenders.

Given FY 2020 was a challenging for Downer's Hospitality arm, (according to their presentations - virtually no revenue was earned in the 4th quarter), I think these results need to be taken with a grain of salt. Whether these business and capital restructures bear fruit for shareholders is yet to be seen.

Disclosure: Holder