Gold Coast company results: PWR Holdings at Ormeau races to record $14.2M net profit after European success
An Ormeau company that makes cooling systems for the fastest vehicles on Earth is making strong inroads into the European motorsports market.
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ORMEAU-based PWR Holdings has driven a record net profit through increasing sales from emerging technologies, a strong pound, and a growing European market.
Shares rose strongly in response to the news in intraday trading, up 14.39 per cent to $4.69.
The company, which develops and builds cooling systems for Formula One and V8 race cars and military vehicles, on Thursday announced an underlying net profit of $14.2 million — 17 per cent higher than the previous period. Revenue overall rose 26.1 per cent to $65.4 million.
It grew 40 per cent at its UK operation, benefiting from a stronger UK pound, while overall exchange rate movements and hedging delivered a $2.3 million boost to revenue.
However, US revenue fell 7 per cent due to the closure of PWR’s C & R South business. The US remains a manufacturing hub for the company along with its Gold Coast base. Its clients include Ferrari, Audi, Bentley, Ford, Land Rover, Volkswagen and Porsche.
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The Kees Weel-led company declared a final fully-franked dividend of 6.9¢ with a special dividend of 3¢.
Mr Weel said all parts of the business had performed well.
“Investments made in H2 FY18 and H1 FY19 in both people and equipment has enabled us to capitalise on growth opportunities and market developments,” he said.
“The transformation of C & R in the US has seen production volumes and throughput increasing by providing manufacturing capacity for the significant revenue growth in Europe.
“In addition, with some of the OEM (original equipment manufacturing) programs coming on stream in FY20, capacity utilisation at C & R is expected to improve through FY20 and FY21.”
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The company said sales from emerging technologies, such as electronics and battery cooling are starting to reap benefits.
Mr Weel has previously spoken of the importance of electronic cooling systems to the future of the company, stating he sees opportunities to produce products for electric and autonomous vehicles.
Earlier this year the company won a $1.095-million grant to purchase a 3D CT scanner, enabling it to introduce 3D printing to its production, and opened its $10 million Centre of Excellence.
Morgans analyst Alexander Lu, in a note to investors, said the result was broadly in line with expectations.
He said Europe was a the key driver, driven by new products and growth in motorsports and OEM (original equipment manufacturing).
The balance sheet remained strong with $16.6 million in net cash.
PWR did not provide guidance for FY20 and FY21, although it said the outlook was positive.
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