| Oxley Holdings | |
| Share price: 50 c |
Target: 85 c Source: RHB |
Not only is Oxley Holdings' profitability rising but its risk profile (going by gearing and cashflow) is turning positive, as CIMB's report shows.
Excerpts from CIMB report
Analyst: William Tng, CFA
Management aims to lower gearing and raise recurring income 
L-R: Excutive chairman Ching Chiat Kwong and deputy CEO Eric Low. NextInsight file photo. Given the rising interest rates, management is working to de-gear and intends to explore other asset-light approaches for further expansion in overseas markets.
As at 31 Dec 2016, Oxley Holdings Limited (OHL) had S$2.60bn unbilled contracts (S$0.49bn in Singapore and S$2.11bn overseas).
Typically, management aims to achieve gross margins of above 30% for its projects. It also expects recurring income to expand from its portfolio of industrial and hotel assets.
 Net gearing ratio has declinedOHL’s net gearing has decreased substantially from a historical high of 5.58x at endFY6/12 to 2.11x at end-2Q17. In FY11-15, OHL registered negative operating cash flow. However, in FY16, operating cash flow turned positive and the trend continued in 1Q- 2Q17. In 1Q17 and 2Q17, OHL’s free cash generated covered 5.9x and 8.4x, respectively, of cash interest expenses paid.  |
Full report here.
