Construction and related services company Acrow Ltd (ASX: ACF) delivered record revenue for the full year, with broker Shaw and Partners convinced the company is set up for strong share price growth.
This will be good news for shareholders who have weathered a 4.4% fall in the value of their shares over the past year.
Before we get to the broker’s share price forecast, let’s have a look at the company’s recently-released full year results.
Revenue strong but profits lower
Acrow reported revenue of $336 million, up 27% on the previous year, while underlying net profit fell 20% to $27.6 million.
The company also paid a lower final dividend, reducing it from 2.95 cents per share to 1.42 cents.
In terms of the outlook for FY27, the company is expecting revenue to grow 30% and EBITDA to be 37% higher.
Towards the end of the financial year the company announced the proposed acquisitions of Preston’s SuperDeck platform system business and AGIS, with the acquisitions funded by a $70 million capital raise and a $16 million share purchase plan.
One of the main drivers for the company going forward will be the Queensland Olympics, with the company saying:
[It] presents a substantial multi-year pipeline for Acrow, with major venue projects progressing toward builder awards in Jul-Dec 2026 and construction ramp-up from Jan-Mar 2027. Acrow is well positioned across all Olympic venues, athletes’ villages and associated infrastructure, with strong alignment to its formwork, falsework, Jumpforms, screens and industrial access systems. The scale and duration of the program – from initial works through peak delivery between 2027 and 2031 offers a significant long-term growth opportunity in Queensland. Â
Acrow Chief Executive Officer Steven Boland said regarding the results:
The Company has experienced a period over the past two to three years of stagnated profits, primarily due to the downturn in construction activity across the Queensland construction market. During this period, we have invested strategically to expand our national Jumpform, Screens and, most notably, our Industrial Access businesses. Today, Industrial Access generates more than $200m in revenue and has significantly enhanced the quality, stability and resilience of our earnings base. Our Construction Services division has now turned the corner with the second half revenue reaching a record level for any half yearly period, with most of the growth experienced in Q4. This momentum has continued into FY27. Looking ahead, we see significant opportunities across both our Industrial Access and Construction Services businesses.
Shares are looking cheap, broker says
In a note to clients, Shaw and Partners said that Acrow had finished the year strongly and was well-positioned heading into FY27.
The broker has a price target of $1.35 on Acrow shares, which is materially above the current share price of 97 cents.
The company is also expected to pay a dividend yield of 4% this year.
The post This ASX builder is well positioned for 40% share price growth: Broker 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.