Restructuring measures are paying off

Article Excerpt

WAJAX CORP. $24.19 (Toronto symbol WJX; TSINetwork Rating: Extra Risk) (905-212-3300; www.wajax.ca; Shares outstanding: 20.0 million; Market cap: $484.5 million; Dividend yield: 4.1%) sells and services cranes, forklifts and other heavy equipment. It also provides related parts and systems such as ball bearings, hoses, diesel engines and transmissions. Wajax’s customers are spread across the resources, construction, manufacturing and transportation industries. In the three months ended March 31, 2018, the company’s revenue rose 7.3%, to $342.7 million from $319.4 million a year earlier. Wajax made $10.4 million, or $0.53 a share, in the latest quarter. That’s up 65.1% from $6.3 million, or $0.32 a share, a year earlier. Cost cuts boost profits In addition to the higher revenue, the company’s ongoing restructuring efforts contributed to the profit gain. That plan aims to reduce Wajax’s workforce by 10%. The company expects annual savings of about $17 million. The restructuring should also result in earnings of $2.11 a share in 2018. Wajax’s shares now trades at 11.5 times that forecast. The company’s…

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