Verbrec’s transformation lifts off
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Verbrec is marking a major milestone in its transformation as it transitions to higher margin generating $77.4m work in hand. This remains at historical highs, in the key growth sectors of the energy and digital industries while closing off poor performing legacy projects.
Its full year financial report released today Verbrec (ASX:VBC) has announced a 32.1% increase in gross profit to $35.4m, a whopping 900% lift in earnings and a 24.6% surge in revenue to $121.4m.
Significantly, the leading mid-tier engineering, infrastructure and training service won more work during FY22 than it derived in revenue.
And with a $13.9m increase in finance facilities to $23.8m and greater flexibility from its new banking partner Westpac, which is also a sign of confidence in the company, its now looking forward to making the most of those opportunities.
Those opportunities include Verbrec’s expertise and contracts in energy transformation, with projects in that sector making up 55% of FY2022 revenues. Examples include transforming infrastructure to process and transport hydrogen and renewables, as well as decommission oil and gas infrastructure.
Another bright spot was Verbrec’s internally developed stockpile inventory monitoring software StacksOn™, which is now live at all BHP WA iron ore sites.
The company also finally closed two of the three poor performing legacy projects, which helped lift its statutory gross margins by1.6% over the prior year.
The final legacy project, a utilities SCADA (supervisory control and data acquisition) upgrade, achieved two important milestones in the second half of the 2022 financial year. It also demonstrates Verbrec’s strong expertise in control systems as the project is one of the largest of its type undertaken in Australia, delivering a single platform to monitor and control a complex network of water and sewerage assets. The end result will provide increased resilience and reduced operating costs.
CEO and MD Linton Burns commented: “The conclusion of our legacy projects and strengthening underlying margins, supported by our improved finance facilities, and above all else with the continued contributions of an outstanding, enthusiastic and passionate team, I am confident that our statutory margins will progressively trend upwards (towards underlying margins) to deliver a strong rebound in our operational performance.
“Our prospects are enhanced by the significant investment pouring into our key markets.
“These include the energy sector and the related activity in battery metals exploration and mining, underpinned by high energy prices, investment in renewables and digital transformation across all industry sectors.
“Our expertise in control systems, grid connections and pipelines, uniquely positions Verbrec to play an important role in transforming assets for a more sustainable and smarter future.”
This article was developed in collaboration with Verbrec, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.