Ann: FY20 Full Year Financial Results, page-38

From Bell Potter late yesterday on results:

Underlying FY20 EBITDA of $26.5m was slightly ahead of our forecast of $26.2m and within the guidance range of $26-27m. Revenue of $58.2m was slightly below our forecast of $59.0m but was also within the guidance range of $57-59m. Cash flow was the highlight of the result with operating cash flow equating to 82% of underlying EBITDA and free cash flow equating to 62% of operating cash flow. There was no final dividend but we did not expect any.

FY21 EBITDA run-rate provided for UWL/OPC

Uniti did not provided FY21 guidance on a standalone basis but rather provided a pro forma EBITDA run-rate for Uniti and Opticomm combined. The company said it expects the underlying EBITDA run-rate to be >$90m which assumes the exit run-rate for Uniti (c.$41m) and the reported pro forma FY20 EBITDA for Opticomm (c.$40m) plus the $10m in assumed synergies. On the conference call CEO Michael Simmons said he would provide an update on the run-rate when the acquisition was completed.

We have updated our forecasts for the modest earnings changes as well as market movements and time creep. There are no changes in the key assumptions we apply which are a 20% premium in the relative valuations and a 9.3% WACC and 5.0% terminal growth rate in the DCF. The net result, however, is no change in our PT of $2.25 which is >40% premium to the share price so we maintain our BUY recommendation.