The Lycopodium Limited (ASX: LYL) share price is spiking 11.28% following the release of the company's full-year FY22 results.
Lycopodium is an engineering and project management consultancy working primarily in mining.
The micro-cap ASX share began the session at $6.14 on Wednesday — a 4.95% bump on yesterday's closing price of $5.85. It then ascended to $6.80 — a new 52-week record — before settling back to $6.51 at the time of writing.
Image source: Getty Images
ASX share hits 52-week high on FY22 results
The highlights of the report are as follows:
- Revenue of $232.2 million, up 43% on the prior corresponding period (pcp)
- Net profit after tax (NPAT) of $27.2 million, up 92% pcp
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $45.4 million, up 71% pcp
- Earnings per share (EPS) of 68.4 cents, up 92% pcp
- Cash balance of $100.9 million, up 31% pcp
- Final dividend of 36 cents per share with 100% franking, payable on 7 October
The record profit is enabling the company to more than double its dividends. It will pay a total of 54 cents per share for FY22. This is up 116% on the 25 cents per share it paid shareholders for FY21.
Based on the Lycopodium share price at the time of writing, this represents an 8.3% dividend yield.
In its announcement, Lycopodium said: "FY2022 has been a successful year for the business, with the award of new study work and the progression of several significant projects to the construction phase."
What else happened in FY22?
Several projects commenced on-site works in FY22, including the Motheo Copper Project in Botswana. The Bomboré Gold Project in Burkina Faso and the Ahafo North Gold Project in Ghana also began works.
Lycopodium strengthened its profile in the lithium sector with several new projects awarded to it.
In Western Australia, this includes the EPCM (engineering, procurement and construction management) contract for Talison Lithium's Chemical Grade Processing Plant #3 (CGP3). It also won the EPCM scope for the Kathleen Valley Project owned by Liontown Resources Limited (ASX: LTR).
Overseas, Lycopodium won the engineering, procurement and secondment services contract for the Goulamina Lithium Project in Mali. Owned by Leo Lithium Ltd (ASX: LLL), it is one of the largest lithium deposits in the world.
Other key projects secured include the early works on the expansion of the Sabodala-Massawa complex. This is the largest producing gold mine in Senegal and is owned by Endeavour Mining.
Lycopodium is also providing design consultancy services to CSL Limited (ASX: CSL). It's helping the biotech giant plan for new vaccine production facilities.
What did management say?
Lycopodium managing director Peter De Leo said:
We have returned a record profit result this year. The fact that we have been able to continue to win work, provide opportunities for new people to join the business and support our clients to deliver their projects, despite the pandemic prevailing for two years, is a reflection of the strength, commitment and resilience of our people.
What's next?
Lycopodium notes there is much activity in the mining sector. It expects base metal usage to increase as global industrial activity resumes following COVID-19.
The company also foresees increased demand for iron ore (especially from China), and gold because it is seen as a safe-haven asset in volatile economic times.
It notes that the energy transition will necessitate the building of new energy and transport systems.
Lycopodium also points to rising demand for minerals and metals used in electric vehicle batteries and portable electrical appliances. This includes lithium, graphite, copper, nickel, manganese, and cobalt.
Lycopodium said its FY23 performance is likely to be "broadly in line with that achieved in FY2022".
The company says it will provide revenue and profit guidance at its annual general meeting in November.
Lycopodium share price snapshot
This ASX share is one of few enjoying a strong year in 2022. The Lycopodium share price is up 27% in the year to date. By comparison, the S&P/ASX All Ordinaries Index (ASX: XAO) is down 9%.
Lycopodium has a market capitalisation of $232.5 million.
