VBC.Verbrec

[lorraina]

292,170,060 shares on issue.
Market cap at 0.065 cents is $18,991,053
eps...1.01
PE 6.44
Revenue $91.94 mil.

Verbrec Limited (VBC) is an engineering, asset management, project delivery, operations & maintenance, training and mining technology service provider that supports customers across Australia, New Zealand, Papua New Guinea and beyond. The Company serves the energy, infrastructure, and mining industries through their technical specialties; asset management, automation and control, pipelines, power, process plant and training, with capabilities that span across the entire life cycle of an asset.

From DMX newsletter;
Verbrec (ASX:VBC) – profit and cash-flows, with dividends coming
Engineering contractor VBC, which has a focus on renewable and transitional energy, confirmed a stronger second half
after a disappointing first half, putting it on an $8m EBITDA / $5m NPAT run-rate, notwithstanding the Australian and
US elections disrupting client demand during the year. We would expect a less disruptive, and stronger, FY26. With a
market cap of <$20m, ~$6m in franking credits, $10m of tax benefits, an emerging software asset (which is being
monetised with BHP its inaugural customer), and entering FY26 trading on a PE of <4x, we believe VBC is significantly
mis-priced and represents compelling value. We are pleased to have become a substantial shareholder here. Much like
RPM, we believe VBC can double its market cap and still be very cheap.

[Dolcile]

Thanks for highlighting this company Lorraina. 
The part that concerns me is there cash flow.  Whilst making a profit, there operating cash flow after lease payments is negative in H1 and FY24.  They are seemingly have to borrow to fund premises.

What gives?   

[lorraina]

From RAAS Research as a Service report.
Business Update
Other than the announcement of contract wins, t   he key takeaways from the business update    are:
Solid profit performance expected for the half   – After a challenging end to 1HFY25 whereby it
appears one or two material near   - term contracts    with early stage revenue components were not
awarded late in the    period, management stated project delays were impacting pipeline conversion
for the second half   . Although it's likely that that revenue has been impacted, management has now
stated that it 'expects a solid profit performance for the half, exceeding the EBITDA and NPAT results'
of the two preceding half   - year periods. In our view   , this is clear validation for the cost and operating
disciplines the management team has focused on implementing over   the past  two years.
Continuation of improving cash and balance sheet position   – There was no numeric cashflow or
balance sheet detail provided in the update, but management stated 'Verbrec continues to improve
its cash position and strengthen its balance sheet'. This suggests cash conversion continues to be
strong and we assume there    will be further debt reduction over the half. As at 31 December, VBC
had net debt of $1.5m   . Our forecasts see this reversing to a 30 June 2025 net cash position of $1.   0 m.
Again, a solid outcome in a challenging environment.

[Dolcile]

Some good price movement albeit on low volume

[Dolcile]

10c early doors.  Thanks for alerting me to this company - it was great buying at mid 6c.  Just should have got more.

[HAWKDOG]

292,170,060 shares on issue.
Market cap at 0.065 cents is $18,991,053
eps...1.01
PE 6.44
Revenue $91.94 mil.

Verbrec Limited (VBC) is an engineering, asset management, project delivery, operations & maintenance, training and mining technology service provider that supports customers across Australia, New Zealand, Papua New Guinea and beyond. The Company serves the energy, infrastructure, and mining industries through their technical specialties; asset management, automation and control, pipelines, power, process plant and training, with capabilities that span across the entire life cycle of an asset.

From DMX newsletter;
Verbrec (ASX:VBC) – profit and cash-flows, with dividends coming
Engineering contractor VBC, which has a focus on renewable and transitional energy, confirmed a stronger second half
after a disappointing first half, putting it on an $8m EBITDA / $5m NPAT run-rate, notwithstanding the Australian and
US elections disrupting client demand during the year. We would expect a less disruptive, and stronger, FY26. With a
market cap of <$20m, ~$6m in franking credits, $10m of tax benefits, an emerging software asset (which is being
monetised with BHP its inaugural customer), and entering FY26 trading on a PE of <4x, we believe VBC is significantly
mis-priced and represents compelling value. We are pleased to have become a substantial shareholder here. Much like
RPM, we believe VBC can double its market cap and still be very cheap.

Great call, its only gone up since your post.

[Dolcile]

A great call and more gains to come I'm expecting.  Already up 49% - thanks!

[lorraina]

The Australian small cap sector appears to becoming to life again after being dormant for the last 2 or 3 years.
This week there were good updates from AMO and LBL.
I recently bought back into ACF,  HCL,and PPL.
I have also added SEN to my porfolio,but think I may have made a mistake buying them,although they last traded at 2 cents compared to my buy price of 1.7 cents.

[Dolcile]

Solid result. Small dividend announced. Trading at a PE of 6.8x seems cheap to me.

https://announcements.asx.com.au/asxpdf/20250828/pdf/06ngtmdlr0fq80.pdf

[lorraina]

The Australian small cap sector appears to becoming to life again after being dormant for the last 2 or 3 years.
This week there were good updates from AMO and LBL.
I recently bought back into ACF,  HCL,and PPL.
I have also added SEN to my porfolio,but think I may have made a mistake buying them,although they last traded at 2 cents compared to my buy price of 1.7 cents.

You have to laugh at yourself sometimes.
Seems I have to do it more than I would like.!
My high conviction stock was ACF.Sold as I did not like their result.Broke even.
The company I thought I made a mistake buying SEN is trading at 2.4 cents up 41%..??    lol,

Investor presentation.
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02987674-6A1281467&v=c2533a54e2514fb77a8f93f84db686e1125273e9

[lorraina]

More on my "mistake" buy SEN.
https://stockhead.com.au/tech/senetas-builds-cash-war-chest-and-doubles-down-on-sovereign-cybersecurity/

[lorraina]

Will know on Thursday about the material commercial agreement..'

[Dolcile]

Trading halt pending a "material commercial agreement"

Hopefully this puts a rocket under the share price.

[Dolcile]

Sale of the training business for $11.5m cash.  No information on how much this contributed to profit and FCF though 

[Dolcile]

From the annual report

Training segment

$7.6m Revenue
$1.9m EBITDA