STEFANUTTI Stocks Holdings, the new kid on the block among the tier one construction companies on the JSE, continued to please a weak market yesterday.
The company’s trading statement predicted a 70%-90% rise in earnings and headline earnings for the year to end-February.
The stock was up nearly 12% in early trade on the JSE to R7,50 a share — this as the FTSE/JSE all share index slid 2,3% and the construction sector index slid 0,9%.
The stock traded at a price:earnings ration of about 6,5 — ranking it among the highest in a sector of the JSE where ratings have declined considerably since last year.
Some construction companies were forced to announce the cancellation of some of their contracts, despite strong infrastructure spending plans for years ahead in SA.
Stefanutti Stocks listed in 2007 and has grown aggressively through acquisitions.
It made three acquisitions in 2007, and the much bigger R1,1bn Stocks acquisition last year.
Its order book is healthy at R6,6bn at the end of the last interim period — revenue more than doubled in the six months to R2,75bn.
The year-end trading statement does, however, signal a slight lowering of the earnings growth momentum. The interim trading statement pointed to earnings growth of 80%-105%.
But really, this is splitting hairs. There are very few companies on the JSE coming remotely close to this kind of profit growth.
Another construction stock to rise sharply was Raubex Group.
It ended 5,4% up at R18,98 after saying it had won two road construction contracts in Namibia worth R1bn.