Report
David O'Brien

Another significant increase in our estimates

Strong interim results, combined with good visibility on the outlook into Q1 2022, cause us to revisit estimates for the second time in as many months. A favourable outlook for Crestchic continues to be driven by a combination of strong data centre markets globally and, a return of large projects.

The proposed disposal of Tasman is ongoing, with management engaged in discussions with third parties and an expectation that following its sale the Group will be debt free. A positive outlook is underpinned by the Board’s desire to return to the dividend list, seeking to create distributable reserves at a forthcoming General Meeting.

This encouraging news has resulted in our adj. EPS expectation for FY2021 rising by 24.3% to 8.7p, hot on the heels of the 24.9% increase in August. We have also introduced estimates for the FY22 financial year, with adjusted EPS of 10.9p and a dividend of 1.5p, the first since 2014.

With the shares trading on a sector average, we feel this fails to factor in the positives above, nor properly value the rental assets. Pending confirmation of the final terms of Tasman disposals, our current Fair Value / share rises to reflect our forecast EPS upgrade: from 152p to 189p.
Underlyings
Caterpillar Inc.

Caterpillar is a manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company segments include: Construction Industries, which supports customers using machinery in infrastructure, forestry and building construction; Resource Industries, which supports customers using machinery in mining, heavy construction, quarry and aggregates, waste and material handling applications; Energy and Transportation, which supports customers in oil and gas, power generation, marine, rail and industrial applications, including Cat? machines; and Financial Products, which provides financing and related services.

Herc Holdings Inc.

Herc Holdings is an equipment rental supplier. The company conducts its operations through subsidiaries, including Herc Rentals Inc. Operations are conducted under the Herc Rentals brand in the U.S. and Canada and under the Hertz Equipment Rental brand in other international locations. The company sells used equipment and contractor supplies such as construction consumables, tools, small equipment and safety supplies; provides repair, maintenance and equipment management services and safety training to certain of its customers; provides equipment re-rental services and provides on-site support to its customers; and provides ancillary services such as equipment transport, cleaning, refueling and labor.

HSS Hire Group

HSS Hire Group is engaged in providing tool and equipment hire and related services. Co. operates in two business segment; the Rental and related revenue segment comprises the rental income earned from owned tools and equipment, together with related revenue such as resale, transport and other ancillary revenues; and the Services segment comprises Co.'s rehire business (HSS OneCall), HSS Training and TecServ. The HSS OneCall provides customers with a single point of contact for the hire of products that are obtained from approved third party partners; the HSS Training provides customers with specialist safety training; and the TecServ provides customers with maintenance services.

Northbridge Industrial Services

Northbridge Industrial Services is engaged in the sales and hire of industrial equipment on a global basis for use in applications in the oil and gas, shipping, construction, and power and utility sectors. Co. has two main reportable segments: Crestchic loadbanks and transformers, which is involved in the manufacture, hire and sale of loadbanks and transformers; and Tasman oil tools and loadcells, which is involved in the hire and sale of oil tools and loadcells.

Schlumberger NV

Schlumberger provides technology for reservoir characterization, drilling, production and processing to the oil and gas industry. The company has four segments: Reservoir Characterization, which consists of the principal technologies involved in finding and defining hydrocarbon resources; Drilling, which consists of the principal technologies involved in the drilling and positioning of oil and gas wells; Production, which consists of the principal technologies involved in the lifetime production of oil and gas reservoirs; and Cameron, which consists of the principal technologies involved in pressure and flow control for drilling and intervention rigs, oil and gas wells and production facilities.

United Rentals Inc.

United Rentals is an equipment rental company that operates throughout the United States and Canada, and Europe. The company's general rentals segment includes the rental of construction, aerial and industrial equipment, general tools and light equipment, and related services and activities. This segment's customers include construction and industrial companies, manufacturers, utilities, municipalities and homeowners. The company's trench, power and fluid solutions segment includes the rental of construction products and related services. This segment consist of: Trench Safety region, Power and Heating, Ventilating and Air Conditioning region; and Fluid Solutions and Fluid Solutions Europe regions.

Provider
Equity Development
Equity Development

​Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.

Analysts
David O'Brien

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