Fleetwood soars on improved guidance

Modular building business Fleetwood has raised its half-year earnings guidance to as much as $16 million as the board approved an increased annual dividend payout.

Fleetwood this morning said it expected to receive earnings before interest, tax, and amortisation (EBITA) of between $15 million and $16 million, compared with its previous earnings guidance of $12.8 million, issued at the company’s AGM last year.

The news sent Fleetwood’s shares up by more than 16 per cent to close at $2.56.

Fleetwood, which has a facility in High Wycombe near Perth Airport, finished the first half of the 2021 financial year with $64 million in cash, down from $66 million at June 30 last year. 

That was after accounting for a first-half dividend payment of $11.4 million, Fleetwood said.

Today, the board also approved an increase in the annual dividend payout ratio to 100 per cent of net profit after tax. 

Fleetwood said the increase represented the board’s confidence in the business and recognised the company did not anticipate further acquisitions.

Interim chief executive Andrew Wackett said Fleetwood’s first-half result was pleasing.

“Having three business units and three diverse revenue streams has certainly helped us as a company to weather the impact [of COVID-19]," he said,

“We continue to generate strong cashflow and our new dividend policy, increasing payouts to 100 per cent, demonstrates to our shareholders we will continue to exercise restraint with our capital management."

Fleetwood’s business units comprise accommodation, building, and RV solutions.

The company owns and operates the Searipple accommodation village in Karratha, with Rio Tinto a major client.

Fleetwood said the outlook for its accommodations business remained positive despite predicting second-half earnings would not be as strong as the first half.

Fleetwood also said first-half earnings were flat within its building division as a result of COVID-19 restrictions and project delays, but noted market conditions would improve in line with anticipated government stimulus spending.

Meanwhile, Fleetwood said its RV business finished 1HFY21 with three strong monthly sales on the back of a pandemic-driven boom in domestic travel – a trend the business expects to continue in the second half.