PWR in first half profit surge

ORMEAU-BASED PWR Holdings – which makes cooling systems for the fastest vehicles on earth – has driven first-half revenue 20 per cent higher thanks to its emerging technology and OEM divisions.

The Kees Weel-led company yesterday reported revenue growth of 20.3 per cent to $29.7 million for the six months to December 31 and a 10.1 per cent boost to net profit to $3.456 million.

Mr Weel said a more diverse revenue pie had been behind the growth.

“Together with continued growth in our primary motorsport category, this is expected to continue in H2 FY20 and into FY21,” he said.

The company did not provide guidance but Mr Weel said he expects a “significant increase” to both revenue and net profit for its full-year results.

“I’m really pleased with the half year,” Mr Weel said.

“Our second half is our big period and if the past two months are any indication it will be a fantastic full year.”

PWR’s breakdown of revenue shows its traditional revenue stream of motorsports delivered 54 per cent of revenue to $15.9 million while OEM (original equipment manufacturer) revenue more than doubled from 8 to 16 per cent reaching $4.68 million.

Emerging technologies, which covers new products such as electronic cooling systems, jumped from 5 to 9 per cent delivering $2.68 million.

PWR’s OEM products are made for the North American market where it is manufacturing transmission oil coolers and engine oil coolers for Ford’s GT500 Mustang.

Mr Weel said PWR was making coolers for 8000 vehicles.

He said its work in the motorsports area – where it has made cooling systems used in Formula 1 and V8 race cars – had opened doors to produce custom work for companies such as Ford for private motor vehicles.

PWR has also been named the official supplier to the Mercedes-AMG Project ONE hypercar, incorporating F1 technology in road cars.

Elsewhere in its results, PWR reported normalised pretax earnings rose 34 per cent thanks to efficiencies from higher production volumes.

The company had cash on hand of $7.9 million at the end of 2019.

Despite the strong result PWR shares fell 5 per cent to close 25c lower at $4.30 amid a sea of red on the ASX.

Mr Weel said he had been “saddened” by Holden’s decision to leave Australia.

He started in the automotive industry 50 years ago in a Holden dealership.

“It is an iconic company. It is a shame for Australian manufacturing.”