Corporate: It looks like floods and hail helped deliver a $25m profit for John Lyng
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Two weeks before the end of financial year emergency building works company John Lyng Group (ASX: JLG) has positive news for its shareholders.
It anticipates earnings before tax of $25 million, up 4 per cent from last year. Of this, $4.6 million comes from its sale of its 49 per cent stake Club Home Response & divestment of Sankey Glass.
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But one of the key contributors was non-forecast catastrophe (CAT) recovery work following the Sydney hailstorm and Townsville floods. During the latter disaster, John Lyng deployed a ‘catastrophe rig’ to the city and sent in employees from across the nation to help with the clean-up.
While both events caused billions of dollars in damage, John Lyng contributed to the recovery effort and this has helped its bottom line. Its core business as usual segment also contributed to the result.
John Lyng Group boss Scott Didier said they were “pleased to have played a central role in helping the people of Townsville, and Central NSW, recover from these disasters”.
“This has been a very successful year for the Group and this result is a product of the market-leading national presence we’ve worked very hard to build. The result is only as good as our ability to respond to these events however and this performance demonstrates the impressive capability of our people and our national network.”
While the stock has only gained 3 per cent this morning it has gained nearly 80 per cent in six months.
Senex Energy (ASX: SXY) has entered into a $50m deal with Jemena to sell its recently completed gas processing plant. Senex will receive the full value of the plant as consideration but will then pay a capacity-based gas tolling tarrif to Jemena. The deal will run for 21 years to 31 December 2040.
Image Resources (ASX: IMA) director Li Huang Cheng has bought another $240,000 in shares. He has now bought over a million dollars in the last month and owns nearly 14 per cent of the company. The buys are coming right as the zircon explorer begins to generate revenue, selling mineral concentrate to China.
In a curious move, West Australian broker Hartleys have suspended coverage of two stocks, lithium explorer Core Lithium (ASX: CXO) and coal producer Paringa Resources (ASX: PNL). In relation to both companies, Hartleys said it was reallocating resources to, “stocks with management or assets located in Western Australia where our research is based”. It also said Core Lithium’s suspension was in line with “the current risks for boutique lithium developers”.
Core Lithium was last rated on May 1 as a buy to spike from 3 cents to 4 cents and is currently at that level. Hartleys’ most recent Paringa tip, on May 22, was for it to rise from 15 cents to 42 but has instead fallen to 11 cents. Even then, the target price was cut in half due to lower coal prices.
True to its words, Hartleys rated four West Australian mining companies as buys last week – Fenix Resources (ASX: FEX), Paladin Energy (ASX: PDN), Carnarvon Petroleum (ASX: CVN) and Australian Potash (ASX: APC).
Of these, only the Australian Potash was predicted to rise substantially and Hartleys put a 25 cent target on it. It is currently 7.6 cents.