Boustead

Boustead: 4QFY14 results were largely in line with net profit coming in at $25.5m (-8%) taking FY14 net profit to $70.7m (-13%), dragged by lower value of non-recurring items. Total non-recurring items in FY14 were $10.8m versus $24.6m in FY13. After adjusting for this difference, FY14 net profit would have been 6% higher than that for FY13, and the second highest in the history of the group. Gross margin was maintained at 34.1%. Revenue for the full year was led by the Energy-Related Engineering Division, which achieved record revenue of $181.3m (+49%), driven by a strong management performance on the back of a robust recovery of the downstream oil & gas business. Amidst the continuing competitive landscape globally, the Water & Wastewater Engineering Division saw revenue decline 53% to S$16.3m, while revenue for the Real Estate Solutions Division was down 17% to $209.2m due to a reduction in design-and-build revenue as fewer projects were implemented throughout FY14. Going forward, Boustead expects to see continued growth in its core businesses, but caution that profitability may be affected by intense competition and rising costs. Boustead’s order book backlog as at end Mar ’14 stood at $380m, comparable to the $378m in end Mar ’14, underpinning earnings visibility for the year. The group has declared dividends of 5¢ (3¢ final and 2¢ special) taking FY14 dividend payout to 7¢ per share (same as FY13), which translates to a yield of 3.7%. At the current price, Boustead trades at 2.7x P/B, and 13.5x FY14 P/E.