Image source: Megapixl

Highlights

  • ATS’ revenue rose 17.7%, earnings from operations increased 41.8%, and income before tax surged 54.4% in FY24 compared to FY23
  • The company’s net income reached CAD 194.1 million in FY24, up from CAD 127.7 million in FY23
  • ATS recently acquired Paxiom Group, aiming to boost revenue, and profitability, and provide organic growth opportunities.
  • ATS’ management expects to convert 36% to 40% of order backlog into revenue in FY25.

ATS Corporation (TSX: ATS), headquartered in Canada, specializes in automation systems. It has a market cap of CAD 4.13bn.

In FY24, the company's revenue rose by 17.7% to CAD 3,032.8 million compared to FY23. This increase was driven by higher revenues from construction contracts and services provided. As a result of this revenue growth, the company achieved a 41.8% boost in earnings from operations, though this was somewhat offset by elevated operating expenses.

The company's income before tax surged by 54.4% to CAD 246.6 million, reflecting  improved operating income. However, this gain was partly counterbalanced by increased net finance costs.

Consequently, the company achieved a higher net income of CAD 194.1 million, up from CAD 127.7 million in FY23.

Recent business update

Lately in June, the company finalised its acquisition of Paxiom Group, a specialist in packaging machines for the cannabis, food and beverage, and pharmaceutical sectors. The company is pursuing several initiatives to increase its revenue and profitability, with a focus on long-term earnings growth. As part of its strategy, it aims to strengthen its position in regulated industries such as food and beverage and life sciences through the acquisition of Paxiom. This acquisition is anticipated to provide opportunities for organic growth, synergistic advantages, and an improved margin profile.

The company also announced that it will release its financial results for the first quarter ending June 30, 2024, before the market opens on Thursday, August 8, 2024.

Company outlook

ATS’ management anticipates converting 36% to 40% of the order backlog into revenues in the first quarter of FY25.

Top 10 Shareholders:

The top 10 shareholders of ATS collectively own approximately 55.28% of the company's shares. Mason Capital Management LLC and Capital International Investors hold the largest stakes, with Mason Capital Management LLC owning about 14.65% and Capital International Investors holding around 8.51%.

Stock performance

ATS' stock price has declined by approximately 4.17% over the past week and about 4.58% over the past month. Additionally, the stock is currently trading below its 52-week high of CAD 61.56 and 52-week low of CAD 41.12.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 29, 2024. The reference data in this report has been partly sourced from EODHD/Others.