Shares in Bilby PLC (LON:BILB) have continued their recent resurgence after the building services provider upgraded its forecasts for the year just gone after getting to work on several contracts earlier than expected.
Bilby said that a number of contracts were due to start in the current financial year but the clients had asked to bring the start date forward.
That meant the revenues generated from those jobs was realised in the year just gone as opposed to the current year.
Clients broaden scope of work
On top of that, some of those clients added various bits on to the jobs which meant the contracts were more lucrative than initially thought.
The net result of completing the more profitable contracts is that underlying earnings (EBITDA) for the year to 31 March 2017 is expected to be at least £3.6mln.
Bilby also told investors it bolstered its cash reserves over the past year thanks to continued investment into operational systems and efficiencies.
The audited financial results for the year ended 31 March will be announced before the end of June, Bilby said.
‘High quality’ Bilby good value for money, says City broker
“The trading update indicates strong progress and ongoing demand for Bilby’s services,” said Northland Capital analyst Mike Jeremy.
“Bilby is well-known for the high quality of its social housing and building maintenance services, a factor which has contributed to the contract extension and demand from clients it reports.
“FY17 (March) EBITDA indicated at £3.6m is 20% ahead of our estimate, as is cash.”
Jeremy has the stock as a ‘buy’ with a target price of 75p.
Shares gained 16.5% on Monday morning to trade at 69.9p.