This morning PWR Holdings Ltd (ASX: PWR) reported its half-year results for the period ending December 31 2018. Below is a summary of the results with comparisons to the prior corresponding half year.
- Net profit after tax of $3.139m, up 53%
- Revenue of $24.76m, up 22%
- EBITDA (operating income) of $5.04m, up 31.5%
- EBITDA margin of 20.3%, compared to 18.8%
- Earnings per share of 3.14 cents, compared to 2.06 cents, up 53%
- Interim dividend of 1.6 cents, compared to 1.1 cents
- $6.8 million cash on hand and no net debt
The PWR share price is down 3.4% to $3.38 on the back of what looks a strong profit report, with the share price still up 36% over the past year.
PWR makes specialist and market-leading engine cooling parts for high performance and professional motor racing cars. Before and since its November 2015 initial public offering at $1.50 per share it has a consistent track record of revenue, profit and dividend growth backed up by a seemingly strong management team well aligned to shareholders.
As such it should tick the boxes for small-cap investors willing to take on more risk in the pursuit of outsized returns. One key risk being its existing valuation with it trading on a very high multiple of trailing earnings.
Others in the automobile and car parts space such as Bapcor Ltd (ASX: BAP) delivered weaker-than-expected results on the back of Australia's weakening macro back drop.
PWR's continued strength goes to show how it's a niche business not so exposed to the economic cycle.
