Mining services stocks are finally getting a break with shares in WDS posting its best surge on record following its profit upgrade.
The engineering contractor to the mining and energy industries jumped 23% to 45 cents this morning, making it the best performing stock on the Uncapped 100.
WDS expects its 2012-13 net profit to come in slightly ahead of its original forecast of between $6 million and $8 million, while revenue is tipped to come in at $350 million to $355 million compared to its February guidance of $330 million to $350 million.
A pickup in demand for its services from oil & gas clients, particularly the APLNG (Australia Pacific Liquefied Natural Gas) contract, has more than offset a slowdown in the mining sector.
WDS has $20 million in cash sitting on its balance sheet and management said it was looking at “increasing returns to shareholders over time”, which can be taken to mean lifting its dividend payment.
It is rare for engineering contractors to issue a profit upgrade in this environment, and the good news has lifted other Uncapped 100 members in the sector, such as NRW Holdings (NWH) and Imdex (IMD).