A tough day on the Australian stock market yesterday, which ended lower for a third day, as miners were sold off on falling commodity prices.
Banks had a bit of a respite and there was a rebound in the afternoon.
The ASX200 index fell 67.3 points, or 1.4%, to 4820.4 after earlier hitting a 31-month low of 4758.5 in the morning, while the All Ordinaries shed lost 75 points, or 1.52% to 4882 after it was off more than 2% in the morning as well.
But the star of the day goes to Brisbane-based Laboratory services and chemicals company Campbell Brothers which saw its shares surge by more than $4 or more than 15% in a market that plumbed new 2 year lows at one stage.
It was a stand out performance and there was a very simple answer: a forecast at yesterday’s AGM for a 60% rise in first half earnings, and that a "similar percentage increase’ was expected for the 2008-09 financial year.
That set the shares alight after the chairman and CEO’s addresses were released after the meeting started in Brisbane at 11 am.
The shares jumped 18% or so to a high of $32.20, before easing back a touch to close up $4.13 at $31.23.
If that 60% rise is achieved, the company will add more than $43 million to net profit by the end of the financial year.
That wasn’t a high for Campbell, which makes much of its money from doing analysis for the mining industry here and around the world.
It touched an all time high of $36 early last December, before Centro Properties killed off our boom by falling victim to the credit crunch by not being able to rollover billions of dollars in debt.
Campbell hit a low of just over $22 in Mid-March in the middle of the near market meltdown when Bear Stearns got into trouble.
Campbell Brothers’ CEO Greg Kilmister told shareholders the company was approaching fiscal 2009 "from a position of strength".
Mr Kilmister said that in the first four months of the new year the company’s businesses continued to grow.
"We are quietly confident that the current momentum will be maintained for the foreseeable future," he added.
Mr Kilmister said first half net profit for the current year, before unusual items, was expected to rise by about 60 per cent from the same period in fiscal 2008.
"A similar percentage increase is expected for the full year."
And chairman Geoff McGrath also said the company’s dividend distributions are also likely to rise.
"It is the board’s intention to raise total dividends in-line with profit growth," Mr McGrath said.
"However, the level of franking credits is likely to remain at around 50 per cent due to the high proportion of earnings generated overseas."
Mr Kilmister said that the Queensland-based mining, energy, chemical and hospitality products and services conglomerate was confident of continuing with its "formidable track record of growth".
"I’m confident that with a new three-year strategic plan in place, that shareholders can look forward to excellent returns in the future," he said.
"Over the coming year you will see the positive impact on the company as that plan is implemented."
The strategy includes mitigating a currently weak US currency through negotiating non US-dollar contracts, expanding current facilities and sourcing bolt-on acquisitions.
Campbell Brothers’ net profit for fiscal 2008 before one-offs rose 30 per cent to $76.82 million, while revenue grew 16.5 per cent to $772.29 million.
If that 60% rise in profit is achieved, earnings would surge past the $100 million mark on an after tax basis.
Gearing, calculated as total debt divided by total debt plus equity, was 36.1 per cent. Interest cover was a healthy 12.2 times.
"The underlying performance improvement is overwhelmingly driven by organic growth," Mr Kilmister said.
"Opening new sites, increasing market share and focusing on more attractive markets.
"Acquisitions will remain an important part of our growth strategy to access new geographies and market segments, but we are not reliant on acquisitions to fuel our growth."
In fiscal 2008 the company used an average Australian-dollar to US-dollar exchange rate of 88 US cents, although Mr Kilmister said Campbell Brothers’ international exposure made foreign exchange a constant risk.
"This excellent performance was achieved despite adverse movements in foreign exchange," he said.
The higher dollar cost Campbell around $5.4 million off net earnings.
The group now concentrates on mining and energy laboratory services, environmental services, industrial chemicals and associated hygiene products, and hospitality sector supply.
