Valmec posts solid first-half results

Shares in Valmec soared by more than 15 per cent this morning after the diversified contractor reported solid first-half earnings and a growing order book.

Valmec told the market it expects to have received underlying earnings of $6.1 million for the six months to December 31, up from last year’s $5.4 million.

However, total revenues are expected to decline from $70.1 million in the first half of FY20 to $61 million.

Though, Valmec said its current order book, which has more than doubled to $195 million, had placed the Kewdale business in good standing to exceed its first-half revenues in the latter half of FY21.

The news sent Valmec’s share price to a high of 26 cents for the day, up 16.8 per cent on Thursday’s close.

The company said it had entered the financial year in its strongest position as a business after securing its biggest contract to date, with Origin Energy for services at its Queensland gas facilities.

That win came shortly after Valmec unveiled an updated corporate structure that focused on building out its asset services division to account for half of the company’s order book and transition Valmec into a “full asset lifecycle provider”.

Valmec said it was well positioned to capitalise on opportunities within the gas, water, resources, and hydrogen sectors, noting recent work on Australian Gas Infrastructure Group’s hydrogen production facility in South Australia.

Valmec ended the second half with $30.5 million in cash.

Its share price dropped back to 25 cents but closed up 13.6 per cent.