Shares in Cardno Limited (ASX: CDD) have tanked more than 11% in early trade, despite the company beating guidance in its financial results for the year ended 30 June 2020 (FY20).
How has Cardno performed for FY20?
Earlier today, Cardno released its results for FY20.
The company's report was headlined by an 11.1% surge in earnings before interest, taxes, depreciation and amortisation (EBITDA) for the full year of $43 million. The result marked the 4th consecutive year in which Cardno has hit or exceeded market guidance. Cardno's result was fuelled by cash flow from operations of $43.5 million for the full year. In addition, the company reported a 4.4% increase in gross revenue of $978.3 million.
Cardno's management noted that the company has been able to continue to deliver it services despite the COVID-19 pandemic. Fee revenue for the full year increased 11% to $677 million, with the Americas being Cardno's strongest region. However, Cardno saw fee revenue down 4% in the Asia Pacific region with the company citing a longer than normal reset.
The company attributed its performance to its speciality offerings in health sciences, natural resources and asset management. Cardno highlighted that the company has zero net debt, however did not declare a final dividend for FY20.
What is the outlook for Cardno?
Cardno is a professional infrastructure and environmental services consultancy company. Despite reporting results that are both up on last year and ahead of market guidance, the Cardno share price has tanked more than 11% in early trade. The sell-off follows the company's softer outlook for FY21.
According to Cardno's management, the company's operations will undoubtedly be impacted by the COVID-19 pandemic. As a result, the company provided conservative guidance for its outlook. For FY21, Cardno anticipates EBITDA to be in the range of $40 million to $45 million.
Operations in the Americas will continue to remain in focus, as the company looks to maintain momentum during the pandemic. Cardno noted that its Asia Pacific business is in the first year of a 2-year rebuilding plan, with the company focusing on lifting margins in FY21.
Foolish takeaway
At the time of writing the Cardno share price is down more than 11.5% and is currently trading near its intra-day low of 29 cents. The Cardno share price has struggled in 2020 and is down more than 36% for the year.
