Boom Logistics Limited

BOL Details

Boom Logistics Limited (ASX: BOL) offers mining maintenance services, engineered specialized lifting services, as well as shutdown, industrial, and programmed maintenance services in the mining sector.

FY21 Results Performance (For the Period Ended 30 June 2021)

• Revenue fell 6.6% YoY to $173.3 million in FY21 indicating the impact of supply chain constraints and deferred projects and shutdowns
• EBITDA grew 53% YoY to $36.3 million in FY21 versus $23.8 million in FY20
• The company turned to net profit after tax at $1.2 million in FY21 versus a net loss of $17.0 million in FY20. EBIT bettered to $4.5 million in FY21 versus a loss of $8.1 million in FY20.
• Operational cash flow before tax stood at $25.9 million in FY21 versus $24.3 million in FY20
• The management has decided to pay a final dividend of 1 cent per share, unfranked, taking FY21 dividends to 1.5 cents, unfranked

Financial Snapshot (Source: Company Reports)

Outlook

Amid solid FY21 results, the company is anticipating further growth in FY22, despite the challenges due to Covid-19 like labour shortages, supply chain restrictions and delays on the project starts. The core focus area is expected to be on high-quality projects and on capital recycling to boost asset use in supporting growth. Revenue is forecasted to rise to circa $105 million in H1FY22, backed by a solid portfolio of work already booked. Further, EBITDA for H1FY22 is anticipated to grow to circa $21 million.

Key Risks

The company is exposed to the following risks from its use of financial instruments, credit risk, liquidity risk, and market risk. The economic conditions due to COVID-19 remain a challenge. There is consequently a degree of uncertainty bordering on the ongoing pandemic and its impact on the mining sector.

Stock Recommendation

The stock posted 6-month and 1-year returns of ~+29.31% and ~+70.45%, respectively. It is currently trading above the average 52-week high price of $0.20 and 52-week low price of $0.10.

Considering the aforementioned factors, the current trading levels, and the associated business risks, we advise the investors to book profits.

Hence, we give a “Sell” rating at the stock price of $0.19 per share, (Time: 12:53 PM (GMT+10), Sydney, Australia), as of 20^th September 2021.

Technical Overview:

Chart:

Source: REFINITIV

Note: Purple Color Line Reflects RSI 14-Period, while the Green and Red Color Line indicates 21 & 50-period SMA respectively.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined:-

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

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