We remain positive on ISOTeam as its earnings turnaround is taking shape. 1HFY24 (Jul to Dec 2023) earnings have shown sequential improvement. The growth outlook remains positive with a strong orderbook of S$182m, tailwinds from strong construction GDP, and more public projects ahead of Singapore’s next general election.
- Read this at SGinvestors.io -
ISOTeam's 1HFY24 earnings below expectations.
ISOTeam (SGX:5WF)'s 1HFY24 revenue grew 17% y-o-y to S$63m while earnings grew 34% to S$1.4m. Revenue growth was largely driven by the repairs & redecoration (R&R) segment, which grew 60% y-o-y to S$26m. Otherwise, growth in the coating & painting (C&P) segment (50% y-o-y; S$8m) was offset by the addition & alteration (A&A) business (-1% y-o-y; S$19m) and others segment (-25% y-o-y; S$10m).
- Read this at SGinvestors.io -
Even though ISOTeam's revenue has exceeded our expectations, overall margin improvement has yet to keep up with our forecast. This has led to lower-than-expected earnings.
Cut FY24F-26F’s earnings forecast by 10-12%.
Read more at SGinvestors.io.
Above is an excerpt from a report by RHB Securities Research. Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.
