The fabulous stock market surge of the ADF Group continued on Tuesday after the unveiling of an impressive financial performance at the start of the year by the Terrebonne metal frame manufacturer.
ADF stock hit another all-time high during Tuesday’s session. The stock’s rise from $3 to more than $20 over the past year is one of the most spectacular in the country.
“We have shareholders who have been patient,” said Jean-François Boursier, chief financial officer of ADF, during an interview given late Tuesday morning in a hotel in Laval, on the sidelines of the meeting. shareholders’ annual report.
At the start of last year, the stock was still worth $2 even though its book value was nearly double that. “We are happy that there is added value for shareholders today,” says Jean-François Boursier. We hoped that the market would see that our strategy was paying off. We got through the pandemic and recessions without having years of significant losses. We now have the wind in our sails. The market is there. »
ADF benefits from a prolonged cycle of infrastructure investment. The company has invested 30 million over the past two years to robotize its Terrebonne factory and replace certain pieces of equipment. Over the past 15 years, $125 million has been spent to modernize operations and add a factory in Montana, United States.
The results confirm the merits of the strategy, underlines Jean-François Boursier. “We are reaping the benefits of our investments,” he says.
“The markets also seem to have recognized our efforts and our results,” he adds.
Market growth is expected to continue for several more years, according to ADF CEO Jean Paschini. “We see good potential over a three to five year horizon,” he said on Tuesday.
ADF, which generates most of its revenues in the United States, has recovered strongly since its business was hit by the terrorist attacks of September 11, 2001, and the recession that followed the 2008 financial crisis.
The order book stands at more than half a billion dollars, including contracts announced at the end of May.
“We still have internal capacity,” says Jean-François Boursier. And we can expand our facilities in Terrebonne and Montana if we ever need more space. »
Up nearly 200% since January 1, ADF Group (Au Dragon Forgé) shares gained 15% on Tuesday to close the session at $20.50 in Toronto.
The ADF stock continues its rise that began three years ago. After surging 30% in 2022, the stock is up more than 230% in the last year.
And despite this impressive rise, the stock still remains relatively under the radar of many investors. A single analyst ensures official monitoring of the company’s activities.
The main financial indicators continue to show notable increases year-on-year. Revenues for February, March and April advanced 34% to 107 million. Gross profit (EBITDA) for the quarter increased 130% to 23 million. The net profit of 15 million for the period equates to a jump of 184%.
Revenue growth (98 million in 2016 compared to 330 million in fiscal 2024) is supported by government infrastructure spending and growth in non-residential construction.
Given the favorable financial position ADF finds itself in today, the size of its order book and its cash flow generation profile, the company is doubling its semi-annual dividend to 2 cents per share and now intends to buy back at cancellation purposes of up to 3 million shares held by members of the founding family.
ADF is a family business of which Jean, Pierre and Marise Paschini hold 45% of the outstanding shares and 89% of the voting rights.
Jean, Pierre and Marise Paschini maintain that the shares in question would be sold for asset diversification and estate planning purposes, that they are not considering further sales of shares, and that they remain fully committed to making grow the business.
