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Spotless Beats Prospectus Forecasts with Profit Growth of 34%

Spotless Beats Prospectus Forecasts with Profit Growth of 34%
Aug 25, 2015 By Ben Visser

Outsourcing facility services provider, Spotless Group Holdings Limited (ASX:SPO) released its full FY15 results to the ASX, beating prospectus forecasts in sales revenue, EBITDA and Net Profit after Tax.

The company’s pro forma sales revenue came in at $2,823.1 million, up 12.3 per cent on the previous corresponding period (pcp), while statutory sales revenue came in at $2,872.9 million, up 9.6 per cent on the pcp.

Pro-forma EBITDA came in at $316.4 million, up 25.5 per cent on the pcp or up 70.2 per cent on a statutory basis. According to Spotless, the strong EBITDA growth was largely due to cost savings and sustainability of the company’s efficiency programs over the past three years.

Pro-forma Net Profit after Tax (NPAT) came in at $142.8 million, up 34 per cent on the pcp, while on a statutory basis NPAT was up 511.5 per cent, due to one-off restructuring and IPO costs in FY14.

Spotless Chairman, Ms Margaret Jackson commented, “Spotless continues to demonstrate its ability to grow revenues and capitalise on an impressive pipeline of tender opportunities in the market. During the year, we were successful in securing a number of major facilities management and multi-service contracts, adding to our stable long-term client base. Our unrelenting focus on costs, efficiencies and financial performance is delivering consistent and growing returns for shareholders and provides us with the flexibility to self-fund growth.”

“Directors have declared a final dividend of 5.5 cents per share, underscoring the Board’s confidence in the company’s forward pipeline and the team’s ability to execute on our growth strategy.”

Going forward the company has mentioned they expect FY16 results to materially exceed FY15 results.

The company’s share price experienced significant appreciation following half year results in February this year. Reaching its peak in mid-April, its share price has declined steeply, most likely due to over buying. Outperforming prospectus forecasts for FY15 and strong forecasts for FY16, will likely result in positive investor sentiment towards Spotless, however current market conditions will likely over shadow any positive results today.

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Ben Visser Author: Ben Visser Aug 25, 2015

Ben is a Wise-owl equity analyst focusing on ASX blue-chips stocks. Ben has a Bachelor of Business in Finance majoring in property valuations and management. In his role at Wise-owl Ben conducts in-depth fundamental and technical analysis which helps him to find profitable investment opportunities on the ASX and abroad.

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