This company’s shares have more than tripled. It’s now predicting 70% earnings growth

Industrial conglomerate Tasmea Ltd (ASX: TEA) is forecasting net profit to grow by 70% next financial year on the back of a record order book and the contribution from a number of acquisitions.  

Strong order book driving growth

The company said in a statement to the ASX that it expected underlying EBITA to be $202 to $208 million and underlying net profit to be $128 to $132 million.

Both figures would be a 70% uplift from the expected results for the current financial year.

The company said:

Guidance assumes a full 12 months’ contribution from the Maxim Group acquisition which is now unconditional and is expected to settle on 1 July 2026 and includes 11 months earnings from JPS Group, expected to settle on or around 1 August 2026.

Tasmea said it had consistently delivered compounding earnings growth since its initial public offer, “with a multi-year EBIT and NPAT CAGR of more than 50% from FY24 to forecast FY27″.

The company said there were a number of factors which had contributed to this, including growth in high-quality, recurring revenues “with an increasing number of master service agreements, facilities management agreements and long term contract with now more than 120 on foot following recent acquisitions and organic customer growth”.

There were also increasing synergies across the company’s portfolio, and the company said the underlying growth from the Tasmea base business was forecast to grow organically at 10% to 15%.

Tasmea also said there were:

Strong industry tailwinds across Australia’s key industries including mining and resources, data centres and infrastructure, oil and gas, electrification, power and renewables, waste and water, telecommunications, defence and retail.

The company added:

Tasmea’s contracted order book has reached record levels, providing strong forward earnings visibility and reinforcing the Company’s ability to deliver sustained organic earnings growth. Demand is underpinned by structural tailwinds across the Group’s core markets.

Of the company’s expected revenues, 62% would come from recurring revenues and another 17% from secured contracts. Another 12% was expected to come from tendered business.

Management have skin in the game

Tasmea Managing Director Stephen Young said:

We are proud to be providing FY27 earnings guidance that reflects the continued strength and momentum of our business. These results are only possible thanks to the outstanding efforts of our people across the country. I want to sincerely thank all Tasmea employees for their unwavering commitment to safety and operational excellence — the foundation of everything we do. Tasmea’s Executive Directors, Mark, Jason, Trent and I have together reinvested over $50 million in Tasmea since IPO—reflecting our continued confidence in the Company’s outlook, our strategy, and the strength of the team that’s driving it with our core purpose, to Deliver Value. Always!

Tasmea shares have more than tripled from $3.20 to $9.62 over the past 12 months.

The company is now valued at $2.52 billion.

The post This company’s shares have more than tripled. It’s now predicting 70% earnings growth appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.