WOR +2.35%: There always seem to be a few issues in WOR results, however, they’re getting fewer and the core part of their business is improving, albeit, it’s coming off a low base. Aggregated revenue for the 1H of $5.61bn was up 7.8% on the year and around 3% ahead of consensus producing an underlying net profit after tax (NPAT) of $188m, ahead of expectations for ~$178m. The dividend of 25cps is not the reason we own the stock, however, the improvement in margins is, as the proportion of work linked to decarbonisation continues to grow. They reconfirmed guidance for aggregate revenue to grow in FY24 with EBITDA margins rising to 7.5-8% (ex-procurement). Lead indicators on their business also looked strong and with a good balance sheet, WOR remains in a very solid spot to take advantage of the global shift to net zero.
- The improvement continues at WOR, as they increase margins on a big revenue line, core profitability will ultimately grow and in our view, could surprise on the upside.
MM remains long & bullish WOR
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