There are very few dividend stocks among ASX listed companies that are vying for growth too.
GR Engineering Services Limited (ASX: GNG)
GR Engineering Services Limited (ASX: GNG) reported a strong performance for the FY24 period, with revenue of $424.1 million, a slight decline from the previous year’s $551.4 million, but with a solid improvement in EBITDA, rising to $50.9 million from $44.4 million. The company successfully completed major projects such as the Thunderbird Mineral Sands Project, Bellevue Gold Project, and the Cosmos Nickel Concentrator Facility Upgrade. Additionally, GR Production Services continued to provide operational and maintenance services to key clients, including Santos, INPEX, and Eni. The Group’s subsidiary companies, Mipac and Paradigm, also maintained strong relationships with major industry players like First Quantum Minerals, Glencore Technology, and Rio Tinto. Despite the lower revenue, GR Engineering's improved EBITDA reflects efficient operational performance across its divisions.
The company is among potential growth companies, as its financial position remains robust, with a strong balance sheet at the end of FY24. Cash holdings stood at $74.6 million, down slightly from $86.0 million the previous year, and the company has negligible external debt. Moreover, GR Engineering has significant capacity in its bank guarantee and bonding facilities, with $67.2 million in undrawn facilities. In terms of shareholder returns, the company, ranked among high quality dividend paying stocks, declared a fully franked dividend of 10 cents per share for FY24, contributing to a total dividend payout of 19 cents per share. Over the past year, GR Engineering saw its shareholder base grow by approximately 40%, increasing from 3,536 to 4,787 shareholders.
GR Engineering is optimistic about its future growth. The Group has a solid order book and a robust pipeline of opportunities across various sectors, particularly in mineral processing and energy. For FY25, the company expects revenue to range between $425 million and $450 million, primarily driven by its contracted order book. The business is well-capitalized, with a strong balance sheet to support its future projects, and it is actively exploring strategic opportunities to further expand its scale and technical expertise.
Kina Securities Limited (ASX: KSL)
Kina Securities Limited (ASX: KSL) recently announced its review of the proposed 2025 National Budget for Papua New Guinea, which includes changes to the corporate tax rate for commercial banks. From 1 January 2025, the tax rate for banks with earnings up to K300 million will decrease from 45% to 40%, and further reduce to 35% by 2026. For banks earning above K300 million, the rate will initially drop to 44% in 2025, with a 1% annual reduction until it reaches 35%. Kina has been actively involved in lobbying for these changes, which are expected to enhance competition among banks and foster investment and business growth in the country. These adjustments are anticipated to have no impact on Kina’s profit outcomes for 2024.
In terms of macroeconomic conditions, PNG's real GDP growth is projected at 3% for 2024, slightly up from 2.7% in 2023. The mining sector, particularly the resumption of the Porgera Mine, is expected to support broader economic growth, including spillover benefits to the non-resource sectors. While inflation has averaged 4.3% over the last three years and is expected to rise to 5% in 2024, it is being managed through the Central Bank’s intervention. Additionally, the country's foreign exchange situation has improved with more export flows and reduced waiting times for imports, further supported by capital investment inflows.
Kina’s performance in 2024 showed organic growth with a 17% increase in gross revenue and a 7% rise in underlying NPAT. The bank's non-lending operations, including wealth management and stockbroking, continue to thrive, with digital revenue growing by 35% and FX revenue surging 71%. Despite a 9% drop in statutory NPAT, mainly due to a fraud-related loss provision, the bank maintained strong shareholder returns with a statutory RoE of 13.2% and underlying RoE of 15.6%. Kina also declared a dividend of 4.0 cents per share, highlighting its commitment to providing value to its shareholders.
Source: Company’s Report
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