800 Super 4Q Results

2 months ago JCprojectfreedom 0

JC Project Freedom 800 Super Q4 Results and share price

800 Super Q4 results was announced on 28th August 2018 and in the next few days, the share price took a beating and dropped from SGD 1 to a low of SGD 0.64. Since then, it has recovered to about SGD 0.80.

In FY2018, the Group achieved revenue of SGD 151.1 m, a decrease of SGD 5.8 m or 3.7% from SGD 156.9 m in FY 2017 due to completion of term contracts and the renewal of some contracts at more competitive prices. In plain language, it means the business needs to bid for jobs from the other big boys and in order to win, they need to lower their margins.

The purchase of supplies and disposal charges increased by SGD 3.2 million due to higher production levels for plastic recycling plant and acquisition of Iwash Laundry (Senoko) Pte Ltd and higher fuel costs. Subcontractor charges increased by SGD 0.8 million or 28.6% to SGD 3.6 mllion in FY 2018. Other expenses increased by SGD 3.3 million or 15.7% to SGD 24.6 million in FY 2018 due to the Acquisition, operating costs on WTE plant located in Tuas South and increase in legal, professional fees for M&A. Some of these cost can be considered a one-off charge.

The company is prudent in terms of cost control, reducing headcount following the completion of term contracts.

The Group has net current liabilities of SGD 8.1 million as at 30 June 2018 as compared to net current asset of SGD 23.7 million as at 30 June 2017. This was mainly due to acquisition of motor vehicles and machines for public waste collection contract, key components for construction of sludge treatment facility and Acquisition and borrowings.

This is a company which has achieved its maximum growth level in the waste collection business, wants to increase other channels of revenue in the environmental service industry and creating a new source of income from laundry services.

I have followed the management for a fair bit and they are very decent people.

Just want to share this company and how the market can be inefficient, overreact for 2 days and return back to equilibrium after that reflecting the correct numbers.