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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Stock of the day: Downer Group

Downer reports a significant financial recovery with an $82.1 million profit, leading to an 18% stock surge.

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This video was created on 28 August for IG audiences by ausbiz.

Stock of the day: Downer Group (ASX:DOW)

Downer returns to profitability

Downer, the engineering firm, has reported a remarkable financial recovery, posting a net profit after tax of $82.1 million. This is a significant turnaround from the previous financial year’s loss of over $385 million. CEO Peter Tompkins credited this recovery to a refreshed leadership team and substantial changes in the company’s operating model.

Shareholders are set to benefit as well, with the total dividend rising by nearly 31% to 17 cents per share. Downer is now targeting an earnings margin of 4.5% by FY25.

Stock rises but caution advised

Following the positive earnings report, Downer’s stock surged by 18%, reflecting strong investor confidence. However, analysts are suggesting caution, suggesting that the significant gain could lead to short-term profit-taking.

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