Matrix Composites announces $61m in new orders
18/11/2011 6 Comments
Matrix Composites & Engineering Ltd (ASX: MCE) announced on Thursday 17th November, that they had secured $61m in new contracts. They also announced that they had $105m in unfulfilled orders and have $560m in outstanding submissions.
This is the first announcement of new contracts since they reported 2011 full year results. Its been a while coming and Matrix had noted in August 2011 that orders had slowed for the whole industry.
In February 2011, Matrix announced that it had received $400m of new contracts in three months, since November 2010. This announcement of $61m in contract wins should be put in that perspective. This should be the first of more announcements to come in the next two-three months, and while it’s a good sign, it should be considered as a baby step in the right direction, and not as a return to the levels of growth the company has sustained over the past year or two.
I’ll be watching with interest to see if Matrix announce more contract wins in the months ahead.
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Not sure how the market will react, but I’m not actually seeing it in a positive light. Because after is all said and done, their order book is actually $5m lower than in 30th June.
I’m also watching on the sidelines; guessing it might get slightly worse before it gets better. At this stage of the year I feel they’re likely to miss the FY12 revenue guidance of 0-10% growth.
Hi Michael,
I think its slightly positive. While the quote book may have gone down, its likely because they’ve converted some of those quotes into orders, so I don’t really see that as a negative.
Definitely a wait and see situation.
cheers
mike
By “order book”, I’m talking about the outstanding orders. Work they are contracted to do but haven’t completed yet. This figure, between 30th June to now, has gone from $110m to $105m.
So my take is that they’ve only gained enough sales to replace the existing workload, and not actually improved their position in the last 5 months. This is a concern as the company is expecting revenue growth but their order book position is much lower than 12 months ago (~$170m).
Apologies for that. I did also note that their quote book had fallen from $600m to %560m. Its definitely not a good sign that their order book has fallen $5m. That kind of indicates that they were down to around $50m of orders before this one came through.
Matrix forecast for a break even (i.e 0) net profit for the six months to Dec 2012 (mainly due to abnormal items of $10m), at their AGM in October 2011. Looks like that’s still their forecast. Revenues are forecast to be $85m, so to match 2011′s performance, the 2nd half of 2012 is going to have to be awesome to even come close to their forecast growth of 0-10%.
Cheers
Mike
Agreed mike.
Nice blog by the way. I’m a recent subscriber and enjoy reading thoughts from a fellow value investor.