The Flagship Growth portfolio owns a number of contractors which are currently showing a loss on paper. The market remains concerned around earnings – they seem to have no trouble winning work, but margins are getting tighter as skills become harder to find. One stock that has proven it can turn contracts into profit is services & specialist construction contractor SRG – yesterday they pushed FY21 expectations to the higher end of the previously guided range and have already set targets for 15% growth in earnings (EBITDA) in FY22 with $1b worth of Work In Hand (WIH). The balance sheet also looks good here moving into a net cash position i.e. no net debt. This is a contractor we like.
MM is bullish SRG
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