Best calls to action – Tuesday, 31 August
About the author:
- Author name:
- By Andrew Tang
- Job title:
- Analyst - Equity Strategy
- Date posted:
- 31 August 2021, 6:00 AM
- Sectors Covered:
- Equity Strategy and Quant
InvoCare Limited - Hidden potential
IVC's 1H21 result was comfortably ahead of our expectations.
Key positives: All divisions except for Singapore delivered improved earnings; Group operating EBITDA margin and ROCE (rolling 12-month) were higher; balance sheet remains healthy; cash conversion was strong at 102%.
Key negatives: Short-term outlook in Australia and New Zealand remains uncertain due to the recent lockdowns; Singapore EBITDA fell 9% due to adverse FX movements and ongoing COVID restrictions.
No outlook guidance was provided but management expects the Delta strain to lead to a softening of the funeral services sector once again in 2H21. We change FY21F/FY22F/FY23F operating EBITDA by -2%/+0%/+1%. We maintain our Add rating.
Read our full reports and latest price targets on ASX:IVC here.
Booktopia Group - Bookending a great year
BKG has produced a FY21 result largely in line with MorgansF, well ahead of prospectus forecasts struck in Nov '20 and ahead of upgraded guidance in Feb. We see BKG as having gained ~170bps of market share in FY21.
We see BKG as well placed to continue to gain share, with a proven ability to attract and retain customers, coupled with current and future improvements to the consumer offering (value, in stock position, loyalty programs).
Our recent retailer survey points to continued improvement (both absolute and relative) to the BKG offering. We see the 250bps margin expansion in FY21 as a prelude of what is to come with the benefits of recent DC automation activity and GM expansion coming through in future periods. We retain the Add rating.
Read our full reports and latest price targets on ASX:BKG here.
Livehire Limited - Playing the field
With the majority of operational metrics provided at the Q4 update in late July, marginal new information from the FY21 result included continued growth in US direct sourcing (DS) clients (+3 to 17) and partners (+2 to 16) in the YTD. LiveHire is looking to aggressively grow their partner network in the US (70+ targeted over 3 years) with 25+ in the current pipeline.
If this were to be achieved, our revised forecast of 146 DS clients in FY26 implies just over 2 clients per partner. With 2 current partners having sourced 5 clients each, this metric would appear conservative. We retain the Add rating.
Read our full reports and latest price targets on ASX:LVH here.
Moneyme Limited - Positioning for a strong FY22
MoneyMe released its FY21 result to the market, with the majority of headline metrics already disclosed at its recent 4Q21 trading update. MME achieved revenue of ~A$58m (+21% on pcp, revenue yield of ~25%).
Overall, a solid year for MME, with a gross loan book at year end of A$333m (+1% on pcp) and A$384m in originations (+115% on pcp), achieved with an expanded product offering (e.g. Autopay) with a launch into new verticals. We alter our FY22F/FY23F Cash EPS by -19%/-2% on revised revenue and margin assumptions.
Read our full reports and latest price targets on ASX:MME here.
Shine Justice Ltd - Guiding for a bright outlook
SHJ reported FY21 EBITDA of A$56.2m, up 9.8% on the pcp and slightly ahead of expectations (guidance for high single digit growth). FY21 DPS was up 23.5%. FY22 EBITDA guidance of 'low double digit growth' was provided.
SHJ is seeing strong momentum in the New Practice Areas (NPA) segment and management expect the PI segment to recommence growth post restructuring.
Resolution of the Mesh class action case is an important catalyst, providing certainty on WIP realisation (likely ~A$40m; first installment received) and providing a further five years of administration work. Risk remains around the final Mesh appeal, however assuming a positive outcome SHJ will be in a strong capital position to pursue acquisitions in addition to the solid organic growth being experienced. Add maintained.
Read our full reports and latest price targets on ASX:SHJ here.
PTB Group - Strong US growth in FY21 and Maldives set to rebound
FY21 Net Profit Before Tax and Foreign Exchange (NPBTFX) was in-line with our expectations (+1%). PTB has not provided FY22 guidance yet but will do so at its AGM in November. We maintain our ADD rating.
Read our full reports and latest price targets on ASX:PTB here.
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You can find further detailed analysis of company results this reporting season by browsing our reporting season tag, and view a full list of upcoming results on our Reporting Season Calendar.
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Disclaimer: Analyst may own shares. The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.