Shares is Coffey International Limited (ASX: COF) are being completely ignored by the market today despite the group reporting its full year results.
By the close of Monday's trading session the volume of trade in the stock was just one trade of 20,000 shares; representing a total value of just $2,800 and suggesting this stock is certainly unloved.
It's understandable really when you consider that to date long-term shareholders have been nothing but disappointed by the group's performance with the stock down around 90% over the past five and ten years.
Coffey operates across a number of consultancy service lines with its operations reported under three divisions: Geoservices, Project Management and International Development. Its peers include the much larger Cardno Limited (ASX: CDD).
Here's what investors need to know about the full year results:
- Revenues declined 7.8% to $579 million.
- Underlying Earnings before interest, tax, depreciation and amortisation (EBITDA) from continuing operations slumped to $23.5 million from $31.2 million in the prior year.
- Net profit after tax (NPAT) from continuing operations was $5.3 million, down from $11.4 million in the prior year.
- No final dividend was declared.
- Net debt increased to $62.4 million.
Outlook:
The Geoservices division saw a contraction in financial year 2015, however, looking forward there are significant transport infrastructure opportunities. The Project Management division continued to perform profitably with the order book significantly higher than one year ago. The International Development division's revenue was roughly flat but pleasingly contracted revenue has risen significantly and with a lengthening order book.
Buy, Hold or Sell: With a market capitalisation of $36 million and underlying earnings before interest and tax of $12.4 million, I find the enterprise value to EBIT multiple of 7.9x somewhat enticing. However, given the group will continue to face headwinds, risk-averse investors might prefer to steer clear.
