What is wrong with Acrow (ACF)?
G'Day James, Sorry for the last minute Q. ACF reported on 21/8. Looked OK to me but the market does not agree. Do you know what might be wrong with this apparently very good business. Thank and best regards, Ron
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Answer
Hi Ron,
This months FY24 result by Acrow (ACF) missed expectations for revenue and earnings as per below.
- Revenue missed estimates by 3.5%.
- Earnings per share (EPS) of $0.089 missed estimates by 13%.
- Profit margin: 12% (down from 16% in FY 2023). The decrease in margin was driven by higher expenses.
In addition, cash flow was impacted as they moved from a very low tax rate (8.3%) to (30.1%) + because they have won a lot of work, their working capital goes up, which is another drag on cash. For FY25 they have guided to revenue growth of ~20% and double-digit growth in earnings (EBITDA), which is encouraging. The stock looks interesting here, but the trend is pretty average on the charts.
