A profitable start to the new year
The new financial year has started strongly with a strong pipeline of opportunities and a lower cost base following an expanded rationalisation programme that resulted in most regions delivering a profit YTD in FY23. The results for FY22 were broadly in line with revised expectations, although the lack of forward visibility results in a continued suspension of estimates. That said, we expect FY23 to prove to be a turning point in the Group’s fortunes as utilisation levels improve now that projects are serviced globally.We are still suspending estimates reflecting a lack of visibility and ongoing uncertainty. While this makes the construction of forward-looking valuation models difficult, we highlight the NAV and within this the level of net cash at the FY22 year end. A historic FY22 price/book ratio amounts to 1.0x, on a book value of £16.4m, which equates to 29.8p/share. Furthermore, £4.9m or 9.1p/share of this is in cash, representing 30.7% of the Group’s NAV.
Comparing DRV to a wider consultancy peer group that trades on an average historic P/B ratio of 4.7x, suggests that DRV (on 1x NAV) remains significantly undervalued. We retain our fair value/share of 49p.
Driver Group is engaged in providing consultancy services to the engineering and construction industries. Co. is organized into three operating divisions: Europe and Americas (EuAm), Asia Pacific, Middle East and Africa (AMEA) and Initiate. In EuAm and AMEA the key service provisions are: quantity surveying, planning/programming, quantum and planning personnel, dispute avoidance/resolution, litigation support, contract administration and commercial advice/management. In Initiate the key service provisions are capital investment consultancy providing development, project and contracting management services to the infrastructure market in the U.K.
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