DB:VA4

Stock Analysis Report

Executive Summary

Valmec Limited, a diversified energy and infrastructure services company, provides equipment, construction, commissioning, and maintenance services to the oil and gas, resources, and infrastructure sectors in Australia.

Rewards

Trading at 92.5% below its fair value

Earnings are forecast to grow 13.72% per year

Risk Analysis

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year

Does not have a meaningful market cap (€36M)



Snowflake Analysis

Undervalued with excellent balance sheet.

Share Price & News

How has Valmec's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: VA4's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.6%

VA4

3.6%

DE Energy Services

1.7%

DE Market


1 Year Return

28.9%

VA4

-15.0%

DE Energy Services

15.0%

DE Market

Return vs Industry: VA4 exceeded the German Energy Services industry which returned -15% over the past year.

Return vs Market: VA4 exceeded the German Market which returned 15% over the past year.


Shareholder returns

VA4IndustryMarket
7 Day-0.6%3.6%1.7%
30 Day0%-7.4%0.8%
90 Day5.4%-3.0%3.7%
1 Year28.9%28.9%-13.0%-15.0%18.5%15.0%
3 Yearn/a-31.0%-38.6%17.1%6.9%
5 Yearn/a-56.4%-74.9%24.3%7.3%

Price Volatility Vs. Market

How volatile is Valmec's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Valmec undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: VA4 (€0.16) is trading below our estimate of fair value (€2.08)

Significantly Below Fair Value: VA4 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: VA4 is good value based on its PE Ratio (10.1x) compared to the Energy Services industry average (14.6x).

PE vs Market: VA4 is good value based on its PE Ratio (10.1x) compared to the German market (21.1x).


Price to Earnings Growth Ratio

PEG Ratio: VA4 is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: VA4 is overvalued based on its PB Ratio (1.2x) compared to the XE Energy Services industry average (0.7x).


Next Steps

Future Growth

How is Valmec forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

13.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: VA4's forecast earnings growth (13.7% per year) is above the savings rate (-0.4%).

Earnings vs Market: VA4's earnings (13.7% per year) are forecast to grow faster than the German market (13.3% per year).

High Growth Earnings: VA4's earnings are forecast to grow, but not significantly.

Revenue vs Market: VA4's revenue (10.6% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: VA4's revenue (10.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: VA4's Return on Equity is forecast to be low in 3 years time (14.7%).


Next Steps

Past Performance

How has Valmec performed over the past 5 years?

-17.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: VA4 has high quality earnings.

Growing Profit Margin: VA4's current net profit margins (3.2%) are lower than last year (3.7%).


Past Earnings Growth Analysis

Earnings Trend: VA4's earnings have declined by -17.9% per year over the past 5 years.

Accelerating Growth: VA4's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: VA4 had negative earnings growth (-6.4%) over the past year, making it difficult to compare to the Energy Services industry average (50.3%).


Return on Equity

High ROE: VA4's Return on Equity (11.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Valmec's financial position?


Financial Position Analysis

Short Term Liabilities: VA4's short term assets (A$44.0M) exceed its short term liabilities (A$29.3M).

Long Term Liabilities: VA4's short term assets (A$44.0M) exceed its long term liabilities (A$879.0K).


Debt to Equity History and Analysis

Debt Level: VA4's debt to equity ratio (33.2%) is considered satisfactory.

Reducing Debt: VA4's debt to equity ratio has reduced from 66.3% to 33.2% over the past 5 years.

Debt Coverage: VA4's debt is not well covered by operating cash flow (1.8%).

Interest Coverage: VA4's interest payments on its debt are well covered by EBIT (5.1x coverage).


Balance Sheet

Inventory Level: VA4 has a high level of physical assets or inventory.

Debt Coverage by Assets: VA4's debt is covered by short term assets (assets are 4.4x debt).


Next Steps

Dividend

What is Valmec's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%1.3%markettop25%3.6%industryaverage4.7%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate VA4's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate VA4's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if VA4's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if VA4's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: VA4 is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of VA4's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average board tenure


CEO

Steve Dropulich 0

7yrs

Tenure

AU$473,824

Compensation

Mr. Steve Dropulich has been Managing Director of Valmec Limited since February 2013. Mr. Dropulich served as Vice President and Managing Director at Enerflex AustralAsia Holdings Pty. Ltd. Mr. Dropulich s ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD318.32K) is about average for companies of similar size in the German market ($USD412.37K).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Steve Dropulich
MD & Director7yrsAU$473.82k5.14% A$1.1m
Peter McMorrow
Non-Executive Director0.3yrsno data0.098% A$21.8k
Stephen Zurhaar
Non-Executive Chairman8yrsAU$109.50k13.05% A$2.9m
Stephen Lazarakis
Non-Executive Director3.3yrsAU$65.70k13.55% A$3.0m

3.3yrs

Average Tenure

60yo

Average Age

Experienced Board: VA4's board of directors are considered experienced (3.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: VA4 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 23.4%.


Top Shareholders

Company Information

Valmec Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Valmec Limited
  • Ticker: VA4
  • Exchange: DB
  • Founded:
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Market Cap: AU$35.830m
  • Listing Market Cap: AU$22.218m
  • Shares outstanding: 125.72m
  • Website: https://www.valmec.com.au

Number of Employees


Location

  • Valmec Limited
  • 17 Ballantyne Road
  • Kewdale
  • Western Australia
  • 6105
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
VMXASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 2014
VA4DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 2014
VMXCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 2014

Biography

Valmec Limited, a diversified energy and infrastructure services company, provides equipment, construction, commissioning, and maintenance services to the oil and gas, resources, and infrastructure sectors in Australia. Its services include gas compression and processing; process services engineering, procurement, and construction; infrastructure service construction; petrochemical and mining fabrication; electrical and underground services; civil and earthworks solutions; asset preservation, service, and maintenance; asset integrity and inspection; structural mechanical piping; electrical and instrumentation; and completions and commissioning services. The company is headquartered in Kewdale, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 22:11
End of Day Share Price2020/02/17 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.