Why this heavily shorted ASX 300 stock is jumping 12% today

PWR Holdings Ltd (ASX: PWH) shares are having a strong finish to the week.

In afternoon trade, the heavily shorted ASX 300 stock is up 12% to $9.85.

Why is this ASX 300 stock jumping?

Investors have been buying the advanced cooling technology company’s shares today following the release of its half-year results after the market close on Thursday.

For the six months ended 31 December, the ASX 300 stock reported a 27.8% increase in revenue to $80.4 million. This was driven by higher volumes across the Motorsports and Aerospace and Defence (A&D) market sectors.

Motorsport revenue increased 40% during the period, supported by broader category adoptions of PWR’s proprietary core constructions. While A&D delivered 31% revenue growth driven by Defence, Commercial Aerospace (including eVTOL) and the developing MRO market.

OEM revenue increased 18.8% in the period reflecting maturity of production programs, and Aftermarket revenue was modestly lower. This is consistent with its deliberate revision of discount structures to support margin improvement.

Growing at an even stronger rate was the company’s EBITDA, which increased 47.6% to $16.2 million. Management advised that this reflected margin expansion from improved operating leverage.

On the bottom line, PWR’s statutory net profit after tax increased 38.6% to $5.7 million. This growth rate was lower due to higher depreciation mostly related to the new Stapylton headquarters, coupled with increased finance charges on higher debt to fund the new facility.

In light of this strong profit, the ASX 300 stock’s board elected to increase its fully franked interim dividend by 50% to 3 cents per share.

Management commentary

PWR’s chairman, Kees Weel, was pleased with the transition to the Stapylton facility. He said:

The successful transition to the Stapylton facility is a significant milestone for PWR, and I acknowledge the team for delivering the project on time and within budget while maintaining operational continuity. The new facility strengthens our vertically integrated global manufacturing platform and supports long-term growth across our key markets.

The ASX 300 stock’s acting CEO, Matthew Bryson, added:

This result reflects strong revenue performance across Motorsports and Aerospace & Defence, together with the early operating leverage from our new, purpose-built Stapylton facility. The move to a significantly larger and more advanced manufacturing platform is a structural step-change for the business, positioning PWR to capture further growth in these key market sectors while strengthening our position in technically complex, niche advanced cooling markets.

Outlook

The company advised that it expects “modest NPAT margin improvement in FY26.”

Looking further ahead, it sees a pathway to NPAT margin recovery. It highlights that “strategic investment in capacity, capability and accreditations underpins growth, with margins expected to trend back toward FY24 levels over a three-to-five-year period, driven by improving operating leverage.”

The post Why this heavily shorted ASX 300 stock is jumping 12% today appeared first on The Motley Fool Australia.

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