Company Coverage
Reclaims Global (RGL SP) : 1HFY27: Healthy Results; Margins Remain Resilient
BUY (Maintained)
Current price:
Target price:
Upside:
S$0.20
S$0.27
+35.0%
Analyst
Highlights
1HFY27 revenue of S$33.3m and earnings of S$3.8m formed 62% and 56% of our forecasts respectively, driven by stronger demand across all segments.
Its orderbook of S$25m, which comprises mostly earthworks projects, provides earnings visibility through 1H28.
Maintain BUY with an unchanged target price of S$0.27. Reclaims currently trade at 8.8x 2027F PE, representing a 15% discount vs peers.
Analysis
Strong 1HFY27 results; margins remained stable yoy. Reclaims Global (Reclaims) reported 1HFY27 revenue of S$33.3m (+53% yoy), representing 62% of our FY27 forecast. This was largely driven by stronger market demand across all business segments. Net profit of S$3.8m (+53.1% yoy), accounted for 55.7% of our FY27 forecast, underpinned by revenue growth.. Gross margin declined 10ppt yoy to 37.6% (1HFY26:47.6%) largely due to higher diesel prices, while net profit margin remained stable yoy at 11.4%, demonstrating improved operational efficiencies despite the incremental costs arising from higher diesel prices and two property acquisitions. On a hoh basis, revenue grew 34.5% on stronger project demand, but both gross and net margin fell 11.4ppt and 6.2ppt respectively largely due to higher diesel costs.
By segment, excavation services grew 47% yoy to S$24.1m, logistics and leasing services grew 52% yoy to S$7.2m, while recycling more than doubled yoy to S$1.7m. Growth in its key business - excavation services - is expected to remain strong, supported by its current orderbook of around S$25m, consisting of largely earthworks projects and some demolition projects. This also provides earnings visibility through to 1H28.
- Interim dividend declared. Reclaim declared an interim dividend of 25 S cents per share, equivalent to a 20% payout ratio (FY26: 54%). Management reiterated that they are prioritising the maintenance of a sustainable payout while preserving cash amid the current volatile operating environment. The interim dividend also comes after an enlarged share base following the 1:1 bonus issue in Mar 26. This is also supported by a cash balance of S$12.2m
Highlights
1HFY27 revenue of S$33.3m and earnings of S$3.8m formed 62% and 56% of our forecasts respectively, driven by stronger demand across all segments.
Its orderbook of S$25m, which comprises mostly earthworks projects, provides earnings visibility through 1H28.
Maintain BUY with an unchanged target price of S$0.27. Reclaims currently trade at 8.8x 2027F PE, representing a 15% discount vs peers.
Analysis
Strong 1HFY27 results; margins remained stable yoy. Reclaims Global (Reclaims) reported 1HFY27 revenue of S$33.3m (+53% yoy), representing 62% of our FY27 forecast. This was largely driven by stronger market demand across all business segments. Net profit of S$3.8m (+53.1% yoy), accounted for 55.7% of our FY27 forecast, underpinned by revenue growth.. Gross margin declined 10ppt yoy to 37.6% (1HFY26:47.6%) largely due to higher diesel prices, while net profit margin remained stable yoy at 11.4%, demonstrating improved operational efficiencies despite the incremental costs arising from higher diesel prices and two property acquisitions. On a hoh basis, revenue grew 34.5% on stronger project demand, but both gross and net margin fell 11.4ppt and 6.2ppt respectively largely due to higher diesel costs.
By segment, excavation services grew 47% yoy to S$24.1m, logistics and leasing services grew 52% yoy to S$7.2m, while recycling more than doubled yoy to S$1.7m. Growth in its key business - excavation services - is expected to remain strong, supported by its current orderbook of around S$25m, consisting of largely earthworks projects and some demolition projects. This also provides earnings visibility through to 1H28.
- Interim dividend declared. Reclaim declared an interim dividend of 25 S cents per share, equivalent to a 20% payout ratio (FY26: 54%). Management reiterated that they are prioritising the maintenance of a sustainable payout while preserving cash amid the current volatile operating environment. The interim dividend also comes after an enlarged share base following the 1:1 bonus issue in Mar 26. This is also supported by a cash balance of S$12.2m
BUY (Maintained)
Current price:
Target price:
Upside:
S$0.20
S$0.27
+35.0%
Analyst
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