Near- and longer-term prospects solidifying
PSI (DE:PSAGn) has delivered a solid recovery in order intake and margins in 2015 to date and management expects double-digit growth in orders and revenues into early 2016. While we are mindful of the economic risks and exposure to the cyclical investment cycle in Electrical Energy, our confidence that PSI can sustain its growth and margin expansion trend is improving.
So far, generally encouraging FY15
So far in FY15, PSI’s performance has been generally encouraging, with order intake for Q1-Q3 growing by 12% to $149m and sales by 7.4% to €137m, driven mainly by demand in Western markets, particularly in Energy and Production Management. EBIT margins for the first nine months expanded from 3.4% in FY14 to 5.3% in FY15, reflecting the lingering impact of cost overruns in Logistics, which suppressed the prior year and operationally geared margin expansion in Energy Management. The outlook also looks encouraging, with management reconfirming its full-year €11m EBIT target (we estimate €11.1m), while order intake and revenues are expected to grow at a double-digit rate into the early part of 2016.
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