SEE: Acquisitions positive for Q&M Dental Group, core business still resilient: KGI Securities
InnoTek’s restructuring efforts that were conducted in 2014/2015 were deemed successful as the current management team now has a five-year record for making profit and generating free cashflow. “InnoTek possesses a strong balance sheet with the ability to generate free cash flow and maintain current dividend rates,” says Tan.
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The company’s diversified customer base, which contributes to its stable outlook, is yet another positive. On this, Tan expects revenues to rebound in FY2021, although it may stay below the $200 million mark unless the company announces new projects in its pipeline. “We forecast FY20/21/22F PATMI at -39%/+25%/+2.5% y-o-y, while FY20/21/22F EBITDA is +1.4%/+8.8%/-0.1% y-o-y as right-of-use depreciation and interest expenses climb,” he adds. Shares in InnoTek closed 2 cents higher or 3.1% up at 67 cents on Jan 13.