Love your work pCap, thank you for continuing to share this...

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25/02/23

19:09

Post #: 66465112
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Originally posted by pCap: ↑

I've been through the results and done my best to update my forecasts below. This is actually a pretty solid result. Probably the most important takeaway is that the decline in EBITDA margins in the labour hire business may not be as bad as it seems. There is a $0.5m amortisation charge from the Linc acquisition that appears (as best I can tell) to be deducted from the labour hire EBITDA result. This charge should be about $0.5m per half for the next 2 halves before its fully written off. Excluding this charge, LH EBITDA margins are above 4.5%. The biggest potential change to the forecasts below is likely to be the acquisition accounting for the latest acquisition. Its likely that there will be a material amortisation charge, however I've been fairly conservative with the acquisition EBITDA forecasts so hopefully EPS shouldn't move around by too much. Other key takeaways are that part of the increase in debt is to fund some new 49% owned startup indigenous labour hire businesses, so hopefully there will be a pickup in equity accounting earnings (not in my forecasts) in the coming years. Overall looks pretty solid and earnings are diversifying nicely. Regulatory change remains the biggest uncertainty but the core business is growing well and dividends should continue growing at a healthy clip. At today's price, you are getting this for 75c (net of pending FF dividend) which makes the valuation stats below even more attractive. BTW - I've also upped the interest charge - Edshan was right in his earlier post.

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Love your work pCap, thank you for continuing to share this fantastic analysis!

ASH Price at posting: 79.0¢ Sentiment: Buy Disclosure: Held
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