World Reach Limited (ASX: WRR) announced this morning that the company’s guidance on FY15 results will likely be outperformed. In prior statements to the market the company indicated that it expected to achieve FY15 profit before tax “broadly in line with budget expectations and the previous financial year”.
World Reach is an Australian company that specialises in strategic ownership of companies involved in the design, manufacturing and distribution of equipment, applications and services for the global needs of Information Communication & Technology markets.
Last year the company recorded a net profit of $439,449 and budgeted an increase to that figure for FY15. Following a strong trading performance in the month of June, the company has reached a point in the preparation of the FY15 financial accounts that it now anticipates FY15 results will be a net profit in the range of $600,000 to $650,000. This is an increase of between 36 to 48 per cent of the results achieved in FY14.
There is a mix of recurring and non-recurring profit items incorporated within the FY15 results. To provide more clarity, the Operating Profit component of the FY15 results should be well ahead of that achieved in FY14, and also ahead of budget, despite the major increase in the company’s amortization and capitalized development projects. There are certain non-operating items, most of which are of a non-recurring nature, currently being reviewed with auditors and others, the net effect of which will give rise to the remainder of the anticipated profit. The company will release quarterly results on the 31 July and expects to release full year results in mid to late August.
World Reach has experienced healthy growth in its share price since January this year. This is a result of promising financial results and securing a lucrative contract with a leading international satellite communications company in April. Following this morning’s announcement, the company has experienced a significant rally in its share price, gaining 24 per cent in the first hour of trading.
Author: Ben Visser
Jul 24, 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.