Acrow Ltd (ACF)
Hi Team, Would you please revisit ACF...thoughts Its a strong consensus buy , with a 5.7% yield Thanks Mark
The Latest Q&A
Answer
Hi Mark,
We acknowledge the ACF is regarded as a Strong Buy but only 4 analysts cover the $325mn engineering and construction business, compared to say 17 who scribe their views on heavyweight BHP. The stock was sold off ~15% following FY25 results – it doesn’t take much with less than $400k worth of shares often changing hands:
- Revenue $117.1mn was up 26% from 1H 2024.
- Net Income $9.38mn was down 24% from 1H 2024.
The company announced a full-year guidance of 27% revenue growth, 14% EBITDA, and 11% NPAT growth, indicating strong future performance. However, there were some negatives which weighed on the stock:
- The company’s net debt increased by $23 million to $92 million, driven by heavy capital expenditure and working capital needs.
The stock is forecast to yield 5.5% fully franked, over the coming 12 months however with debt moving higher, it would be easy for them to priorities debt repayment in the short term.
All in all, there is not enough to attract us to ACF but a move below last year’s 92c swing low would offer more appealing value to MM.
