Valmec Limited
ASX.VMX
19 May 21
Current Details
Share Price 0.32cent
Market Cap $40m
2020
Annual Revenue $112m
EBITDA $5.1m
Business Summary
(VMX), formerly Core Services Group Limited is an Australian energy services group providing equipment, construction, commissioning and maintenance services to the oil and gas, resources and infrastructure sectors throughout Australia.
Product and Services of VMX consist of (i) Process Services Engineering, Procurement and Construction; (ii) Gas Compression and Processing; (iii) Infrastructure Service Construction; (iv) Petrochemical and Mining Fabrication; (v) Electrical and underground services; (vi) Asset Preservation, Service and Maintenance; and (vii) Asset Integrity and Inspection Services.
Insiders
Directors own $14.7m of shares
Since Sept 20 Directors have purchased $189k of shares on the market.
Substantial Shareholders
6 shareholders own 61% of the shares
Financial Details and forecasts
1h FY21
Revenue $61m
EBITDA $6.1m
NPAT $3m
Forward Order book $215m at 31Jan21
67% of order book is recurring revenue
My estimate FY FY21
Revenue $126m (Company outlook)
EBITDA $12.6m. Assumed 10%
NPAT $6.2m
EPS 4.92cps
PE ratio Forecast FY21 6.4 times
The directors expect to make a dividend payment for year ended 30 June 21.
Other details
FY23 revenue forecast $300m.
Pipeline of future opportunities $1.1B
Growth opportunities coming from
Renewable Hydrogen Sector represents a good opportunity for future work.
Other opportunities are in gas , water and resources
Conclusion
The companies current shareholding is tightly held.
Valmex has a good order book with a high level of recurring revenue. They also have some good opportunities for growth over the next few years.
If the FY23 revenue forecast of $300m can be achieved with a NPAT margin of around 5% this will generate around $15m in NPAT (around 11 cps. and forecast FY23 PE 2.9 times)
At the current price of 32cent Valmec seem to be undervalued.
