Bradken back on buy list

Bradken’s share price has fallen 24% since we downgraded the business to Hold following the release of its full year results (see Bradken: Result 2014 (Hold - $5.05)). Those results confirmed that the downturn was hurting – revenue fell 14% and net profit plunged 43% – but capital expenditure and debt were lower while free cash flow grew. The investment case outlined in Time to buy mining services part 3 was on track then and it’s on track now. The consumables business, about 60% of revenue, has been relatively resilient; revenue fell slightly but margins actually rose. It is the...

Bradken’s share price has fallen 24% since we downgraded the business to Hold following the release of its full year results (see Bradken: Result 2014 (Hold - $5.05)). Those results confirmed that the downturn was hurting – revenue fell 14% and net profit plunged 43% – but capital expenditure and debt were lower while free cash flow grew. The investment case outlined in Time to buy mining services part 3 was on track then and it’s on track now.

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