FY21 NPAT forecast at $9m and my back of envelope NPAT estimate for FY22 is $11.6m. Current mkt cap $81m, so that's a forecast PE of only 7 for FY22.
There are some cyclical elements to the business but, with Government supported infrastructure expenditure being particularly robust for the next years, you would have to think the medium term horizon was fine.
In terms of share price, ACF has gone through a long period of relatively flat line consolidation (since 2019) which in a charting sense usually means when the breakout finally occurs, it will be more explosive.
There needs to be a catalyst however to change market sentiment. They have already announced and confirmed strong profit for FY21 and effectively by forecasting 20% EBITDA growth, a strong profit for FY22.
Perhaps it will come from something in there statement from the announcement;
"We will likely be announcing further similar contract wins in the industrial space in the not-too-distant future. Over the next few years, as part of Acrow’s organic growth strategy, we will look to further resource this business (subject to Acrow’s strict investment criteria) and capitalise on the opportunities as they present.”
I am looking forward to it.
ACF Price at posting:
36.5¢ Sentiment: Buy Disclosure: Held
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