KOV - Korvest Ltd

peter2 said:

KOV has rallied to the $9 level, as anticipated and I'm pleased to see the increased volume that accompanied the rally. Seems there's plenty of demand that's soaking up the supply. Anticipating higher prices from here before it levels off.

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Its a good example of the power of finding businesses in unloved sectors, that are well managed by good capital allocators. I wish I could find more businesses as good - and as cheap as when I bought into KOV a few years ago!

I assume you are holding this in an investment PF rather than a trading one, @peter2?

I put this position into a longer holding ("investment") portfolio. I won't say it's been a comfortable hold as I'm mainly a short term trader. KOV does jump up and down, especially after it pays a div. I noticed this several years ago and thought I'd trade the div cycle. Buy the rally, sell before the XD date and buy it back after the price dumps XD. However I soon noticed that the MD was too thin to trade it in this manner with decent volume. My last purchase (only 1K shares) took three days to fill at my price. Argh. The thin MD has kept me in this position for so long since selling when I want has been almost impossible.

My initial purchase (1K shares) at $5.25, ages ago has been increased by buying each time price dipped near the bottom of the recent range ($8.30 - $7) after going XD each Jan and Aug. Overall this is working out nicely with this stock, especially with the recent rally.

KOV goes XD again soon (Feb 15th, 0.25 div). If I was going to sell some, now would be a good time. I've no doubt that price will fall much more than the div when it goes XD. This post div dip will delay price going to $10 for another year.

Aghhh....ok, you still approach it as a trader. I look at it as a business owner!

galumay said:

Aghhh....ok, you still approach it as a trader. I look at it as a business owner!

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as do i

i saw during my cleaning exploits that Korvest supplied a lot of the 'rust-proofed ' metal work for computer-server rooms back during 2011-2014 and whether i like it or not folks still love to build cooled air-conditioned for their server farms

see when you see the trend for net-zero AND the push for digitization of assets you know a scam is in progress ( because BIG money is cheering for both )

but dumb greed/power-lust has almost tripled the value of my KOV holding , what can i say , i am making some profits from this nonsense

ideologically i would rather KOV made more profits from it's construction products ( scaffolds, etc )

• Listed in September 1970

• Overseas supply chain provides make vs buy flexibility

impressive

Look like price is going to go higher again soon. There was a bit of buying on the open and the buyer paid higher prices to get filled. Volume still very low and market depth thin.

Nothing to get excited over. Nothing to see here. Business as usual.

Thanks @peter2, I will try to contain myself.

REVIEW AND RESULTS OF OPERATIONS

Despite the rising cost environment and the temporary lull in major project activity, Korvest achieved near record earnings in FY24.

The revenue from trading activities for the year ended 30 June 2024 (FY24) was $102.89m,down 4.3% on the previous year as a result of lower major project revenue in the Industrial Products segment.

The FY24 result included a non-recurring pre-tax gain of $0.32 million arising from the accounting treatment of entering a property sublease.

DIVIDEND

The directors announced a fully franked final dividend of 40.0 cents per share(2023: 35.0 cents per share) following an interim dividend of 25.0 cents per share at the half year (2023: 25.0 cents per share).
The Dividend Reinvestment Plan (DRP) will remain suspended for the final dividend.

The dividend will be paid on 6 September 2024 with a record date of 16 August 2024.

OPERATING SEGMENTS

Industrial Products

In the Industrial Products segment, the EzyStrut cable and pipe support business supplies products for major infrastructure developments and also supplies products to electrical wholesalers and contractors for small industrial developments.

The major project work from the infrastructure sector was significantly lower in FY24 due to the timing of the supply of rail and road projects down the East Coast.

Four major infrastructure projects were supplied at various times during the year with one being completed and two nearing completion by the end of the year.

The fourth project will continue into FY25 along with another secured project with supply commencing in FY25.
Both projects are expected to extend into FY26.

The day-to-day and small project markets generally improved with NSW,Victoria and Western Australia achieving growth when compared to the prior year.

In July 2023 the NSW EzyStrut branch relocated to a new facility in the Bankstown Airport precinct.
This facility is substantially larger than the previous Prestons site with the extra space enabling the site to operate more efficiently which is improving customer service.

The new lease arrangements result in a significant increase in both the right-of-use asset and lease liability in the statement of financial position.2

The input cost environment remains volatile with key costs such as steel and import freight remaining at relatively high levels despite fluctuations during the year.

The ongoing high CPI has maintained pressure on staff costs as well as impacting leasing costs as most leases have an annual CPI rental adjustment

Production

Overall plant volumes in the Galvanising business were similar to the FY23level with improved external volume compensating for the lower levels of internal work.
External tonnes were the highest achieved for the past decade.
Contracted energy costs remain historically high.
The increased gas costs,which have been incurred since January 2023, continue to be recovered through a customer gas levy.

Energy costs are contracted through to December 2025 and there are ongoing projects to reduce energy consumption.

Profitability of the plant improved due to improved zinc consumption and more efficient use of labour.

There was investment in the plant with the major projects related to improving production capacity and energy use reduction.

OUTLOOK

The outlook for the infrastructure sector remains buoyant. Korvest also sees improving opportunities in the data centre market and has enhanced its product offerings to service this growing market.

The day-to-day market grew in FY24 which offset a significant portion of the reduction in major project revenue.

Subject to the broader economic environment the day-to-day market is expected to continue at similar levels in FY25.

An update on trading conditions will be provided at the Company’s Annual General Meeting.

ANDREW STOBART CHAIRMAN 26 July 2024

For further information contact:Chris Hartwig (Managing Director) 08 8360 4500

This ASX announcement was approved and authorised for release by the Board.

i hold KOV ( 'free-carried' ) ( up 200% for me )

another sweet little fish in the bottom drawer

Nothing abnormal here. This is just the pre-div pump before the post div dump. Mmm nice 0.40 div too.

Trading Update

Following advice from major project customers in relation to delivery schedules, Korvest is expected to deliver a significant increase in the value of project work during the second half of FY25.
This together with our usual pipeline of project and day-to-day work means that Korvest is now entering the second half of the financial year with a record order book
This is expected to contribute significantly to the company’s overall financial performance in the second half resulting in a full year FY25 profit that will exceed the comparative period1

Due to the uncertainty of the precise timing of deliveries it is not possible at this time to quantify by how much the FY25 profit is expected to exceed that of FY24.
The company has previously noted that its first half FY25 performance was expected to have similar revenue compared to the first half of FY24, albeit margins were expected to be lower due to project phasing and competitive pressures in the day-today market impacting first half net profit.
This guidance remains unchanged.
Further, during November, 17 days of production was lost in the galvanising business following a major unplanned maintenance shutdown. The plant resumed full production on 1 December 2024.
Costs related to rectification are expected to be reflected in the company’s first half results, with some recovery anticipated from insurers likely post balance sheet close.



i hold KOV ( 'free-carried' )

Nice little pop! Up over 7% on a down day in the market. Made my portfolio look much better!

Half year results impacted as expected by the contract timing and the production breakdown. Earnings down quite a bit but interestingly OCF & FCF were up slightly. Expect some market reaction but we should see a better H2. No concerns on my part, happy hodler!

galumay said:

Half year results impacted as expected by the contract timing and the production breakdown. Earnings down quite a bit but interestingly OCF & FCF were up slightly. Expect some market reaction but we should see a better H2. No concerns on my part, happy hodler!View attachment 191640

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my average share price is $3.17( ish )

DIVIDEND

The Directors determined to pay a fully franked interim dividend of 25.0 cents per share with a record date of 14 February 2025 and a payment date of 7 March 2025.

The Dividend Reinvestment Plan (DRP) will not operate for the interim dividend.

so am not exactly drowning in tears over this one