Ann: FY21 Guidance Update & FY22 Outlook Announcement, page-8

I have appreciated the share analysis work that others have been prepared to share on Hot Copper, so I thought I would attempt to return the favour.by having a go at extrapolating what this announcement might mean for 2021 and 2022 EPS for SRG.

Assumptions:
I have picked up the EBITDA /Revenue % from the 6mthly figures to 31/12/20 ( roughly 7.5%) and simply extrapolated that for 2021 and 2022 ( allowing for the 15% improvement in the announcement). That would tend to indicate strong growth in revenue, as you would expect with the growth in work on hand.
You can see that I have done much the same with depreciation and amortisation, though I allowed some extra depreciation in 2021 estimates as the plant & equipment net of depreciation in the balance sheet hasn't changed, so there has clearly been some purchases in the six months to 31/12/20.
There wasn't much change in the borrowings at 31/12/20 compared to 6mths before, so I have assumed that they have stayed much the same and that cash has increased arriving at the net cash improvement. Accordingly with cash earning next to nothing, I have left borrowing costs the same for this analysis.
There isn't enough info to work out the tax so I have just allowed 30% for 2021 and 2022.
Shares on issue I have left the same.

If those assumptions are reasonable, they would tend to indicate 2021 EPS will get back to a bit better than 2019 levels and then I estimate 3.8c for 2022 EPS.

That would give an estimated 2022 PE of 14 based on a current share price of 54c. The margin improvement mentioned is clearly evident in the 6month figures to 31/12/20 compared to the last few years.

My thinking is that for this type of business as the revenue mix is steadily changing to a recurring revenue model, that a 2022 PE of 14 is still reasonable value at the current share price.

Obviously these are just my rough numbers, so do your own research, but i would appreciate any thoughts or opinions.

SRG					6mths to
		2018A	2019A	2020A	31/12/2020	2021E	2022E
Revenue		239220000	486391000	519957000	283299000	626666667	720666667
Other Income		876000	6720000	2414000	558000
		240096000	493111000	522371000	283857000	626666667	720666667
Construction cost		92953000	245578000	265297000	146162000
Employee cost		119886000	191388000	207463000	106935000
Other Expenses		19018000	32459000	35347000	10251000
Total Operating Expenses		231857000	469425000	508107000	263348000	0	0
EBITDA		8239000	23686000	14264000	20509000	47000000	54050000
		3.43%	4.80%	2.73%	7.23%	7.50%	7.50%
Less:
Depreciation		6928000	9498000	19119000	11066000	23000000	23000000
Amortisation		92000	6621000	5082000	2007000	4014000	4014000
		7020000	16119000	24201000	13073000	27014000	27014000
EBIT before Impairment		1219000	7567000	-9937000	7436000	19986000	27036000
Impairment Expenses				24761000	0
Equity Accounted Investment		-1011000	-522000	-2779000	6000	12000	12000
EBIT		2230000	8089000	-31919000	7430000	19974000	27024000
Less Finance Charges		628000	1345000	2962000	1368000	2736000	2736000
Profit before Tax		1602000	6744000	-34881000	6062000	17238000	24288000
		0.67%	1.39%	-6.71%	2.14%	2.75%	3.37%
Tax		409000	-2675000	-5194000	2490000	5171400	7286400
Profit after tax		1193000	9419000	-29687000	3572000	12066600	17001600
Shares on Issue		169023570	402445380	444399625	445798415	445800000	445800000
Earnings per Share		0.0071	0.0234	-0.0668	0.0080	0.0271E	0.0381E