Weak Cash ConversionPoor conversion of profits into cash points to receivables, retention, or timing of project payments that strain liquidity. For construction firms this elevates need for external financing or working capital lines, which can limit ability to fund new bids, slow growth, and increase financing costs over the medium term.
Low Net ProfitabilityThin net margins and low ROE indicate limited residual profitability after project costs and overhead. Persistently low returns constrain reinvestment, dividend capacity, and buffer against cost inflation, making the business more sensitive to margin pressure from competitive tendering or rising input costs over coming quarters.
Tender-Driven Revenue ConcentrationHeavy reliance on winning tenders concentrates revenue risk and exposes margins to competitive bidding dynamics and public spending cycles. This structurally cyclic model can create revenue volatility and forces continuous capital deployment to secure backlog, constraining stable growth and margin predictability.