Improved sales of equipment and parts led to a 17.3% jump in revenue for this company during the most-recent quarter.
A recent valve sales, service and support acquisition continues to diversify the firm’s reach across multiple industries.
Meanwhile the stock trades at just 7.7 times the company’s 2023 earnings forecast.
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WAJAX CORP. (Symbol WJX on Toronto; www.wajax.ca) sells and services cranes, forklifts and other heavy equipment. Wajax also provides related parts and systems such as ball bearings, hoses, diesel engines and transmissions.
The company’s customers are spread across the resources, construction, manufacturing and transportation industries.
In the quarter ended September 30, 2022, overall revenue climbed 17.3%, to $470.8 million from $401.3 million a year earlier. Excluding one-time items, Wajax earned $16.7 million, or $0.78 a share, in the quarter. That’s up 7.7% from $15.5 million, or $0.72.
Business conditions due to COVID-19 hurt Wajax’s results in 2021. However, volumes improved steadily through the end of the year and into 2022 as customer activity increased.
Meanwhile, Wajax is still cutting costs to conserve cash until its markets fully rebound. Those efforts should let it keep servicing its long-term debt of $149.4 million (as of September 30, 2022). That equals a manageable 32% of its market cap.
The company recently announced that its wholly owned business Tundra Process Solutions has acquired the valve business of Powell Canada. Specializing in valve sales, service and support, Powell Valve operates facilities in Edmonton, Fort McMurray and Lloydminster, Alberta.
For Wajax, the purchase adds three new valve servicing and repair locations, plus a team of highly skilled technicians, to help accelerate the growth of Tundra’s core business.
The acquisition adds substantially to Tundra’s valve servicing capabilities, including field support, and increases its geographic reach. The newly acquired facilities in Edmonton and Fort McMurray will also provide increased capacity for pressure safety valve testing, assembly and recertification.
Founded in 1999 and acquired by Wajax in 2021, Tundra plays a key role in Wajax’s Industrial Parts and Engineered Repair Services growth strategy. It provides maintenance and technical services to customers in the Western Canada midstream oil and gas, oil sands, petrochemical, mining, forestry and municipal sectors.
The company’s $1.00-a-share dividend for investors yields a high 4.7% and appears sustainable.
Good morning,
I wonder if in current high inflation environment comparative results analysis consider its impact. It may happen that a significant increase in dollar values may be a real different story when adjusting for inflation. It may be difficult to perform but in any case I would suggest that it should be disclosed in the analysis comments if a “normalization” for inflation was / wasn’t performed for comparison purposes.
Respectfully,
Mauricio
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X No, I don’t want to make steady income from dividends.
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Good morning,
I wonder if in current high inflation environment comparative results analysis consider its impact. It may happen that a significant increase in dollar values may be a real different story when adjusting for inflation. It may be difficult to perform but in any case I would suggest that it should be disclosed in the analysis comments if a “normalization” for inflation was / wasn’t performed for comparison purposes.
Respectfully,
Mauricio