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Highlights

  • In FY24, HRX’s revenue surged to CAD629.7 million compared to CAD543.6 million of FY23
  • Driven by heightened volume and pricing strategies, income from operations surged by 128.7%
  • The company’s net income elevated by 176.8% in FY24 compared to FY23

Heroux-Devtek Inc (TSX: HRX) specializes in the design, development, manufacturing, and maintenance of actuation systems, landing gear, and components for the aerospace sector. Through its Megatron operations, HRX produces heat exchangers, electronic enclosures, and cabinets for airborne radars, electro-optic systems, and aircraft controls. Its Bolton operations specialize in manufacturing fluid filter products. The company's product range encompasses military fighter and transport aircraft, helicopters, electronic enclosures, jets, heat exchangers, and cabinets.

The company has a market capitalization of around CAD 833.93mn.

In FY24, HRX’s revenue surged by around 16% to CAD629.7 million from CAD543.6 million in the previous corresponding period (pcp), driven by growth in both civil and defense market segments, along with a 2.8% positive foreign exchange impact. Income from operations saw a remarkable 128.7% increase compared to pcp, primarily attributed to heightened volume and pricing strategies, though partially mitigated by inflationary cost pressures. Income before taxes soared to CAD45.4 million in the reported period, up from CAD18.6 million in pcp, primarily propelled by the augmented operating income, albeit somewhat tempered by increased finance costs in FY24.

Overall, the company’s net income jumped 176.8% in FY24, supported by expansion in EBITDA margin (from 10.3% in FY23 to 13.3% in FY24) In the reported period its liquidity also improved as current ratio stood at 2.11x in FY24 versus 1.89x in FY23.

Recent business update

As per HRX’s announcement dated 22 May 2024, the company's net debt stood at CAD 209.9 million, compared to CAD 165 million as of March 31, 2023. The rise in net debt was majorly due to investments in inventory to maintain upcoming sales growth and stabilize its production system.

Top 10 shareholders

The top 10 shareholders of HRX collectively form around 59.23% of the total shareholdings in the company. Caisse de Depot et Placement du Quebec and Fonds de Solidarité FTQ hold the maximum stake in the company at around 14.28% and around 10.93%, respectively, as depicted in the chart below:

Stock performance

The stock price of HRX has soared by around 7.73% and 27.79% over the last 1 week and 1 month, respectively. The stock has a 52-week high and 52-week low of CAD24.81 and CAD13.88, respectively. It is currently trading higher than the average of its 52-week high and low.

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 June 7, 2024. The reference data in this report has been partly sourced from EODHD/Others.