Upgrading forecasts as FY22 “starts strongly”
Today’s upbeat FY21 prelims from equipment rental specialist Vp provided further evidence of its industry leading status, especially in terms of earning quality, ROCE and cashflow. Posting a better than expected adjusted PBT (pre IFRS16) & diluted EPS of £23.3m & 45.9p on sales of £308m, alongside providing a “positive” outlook. Indeed in our opinion, the group’s through-cycle durability justifies a sector premium, thanks to its consistent returns, adoption of all-things digital and exposure to systemically important verticals such as water, power, renewables, telecoms & rail.Despite the 3rd national lockdown, prospects have improved dramatically over the past 6 months, with current trading described as “strong”, which we have interpreted as being just below pre-covid levels with Groundforce awaiting the usual upswing once AMP7 (water) becomes fully operational.
Consequently we have upgraded are FY22 forecasts to adjusted PBT of £36.9m (vs £33.5m B4) on turnover of £355.7m (£345m) – ending the year with £123m of net debt. The latter factoring in continued working capital control, offset by greater fleet capex (£50m).
Similarly our valuation ticks up from £11.00 to £11.30/share. Meaning the shares at 870p trade on modest 11.9x PER, 11.4x EV/EBIT and 5.3x EV/EBITDA multiples vs peer group averages.
Management will be presenting to all investors at 12pm today so please follow the link to register.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.