Consistency the vital element

While significant one-year returns are a positive sign for any business, maintaining these results year-in-year-out is a challenge of more significant proportions.

Companies listed in the top 50 for one-year returns include some that have maintained significant returns despite not being right at the top of the heap.

Vanadium explorer Precious Metals Australia, which listed in 1988, is one example of a company that has maintained a consistent strong return over the years. It just missed out on the top 10 this year with a one-year return of 464 per cent, following a 756 per cent return last year.

PMA’s core asset is the Windimurra Vanadium project, located 600 kilometres north-east of Perth, is believed to be based on the largest reported vanadium proven ore reserve in the world.

Engineering services company RCR Tomlinson is another to post consistent returns, with 216 per cent and 208 per cent one-year returns for 2005 and 2006 respectively. RCR Tomlinson Ltd was formed by the December 1997 merger of RCR Engineering Ltd and Centurion Industries Ltd, both of which were publicly listed companies.

The company recently announced 137 per cent increase in its net profit, with earnings coming both organically and from complementary acquisitions, including site maintenance business JG Engineering, specialised inspection and maintenance services company VRBT Group, and Australian Crusher Repairs.

Zinc explorer Kagara Zinc has maintained strong returns, backed up by a solid performance and even stronger zinc and copper prices.

The company, which had a 46 per cent return last year, posted a one-year return of 246 per cent in 2006. 

Last month, Kagara announced a forecast EBITDA of $230 million, up from an actual $73 million last year. The company expects to make a net profit after tax of between $35 million and $38 million.