Ann: Full Year Statutory Accounts, page-9

Several interesting points about this company :

- while their FY 23 earnings are flat (for EBIT and NPAT), H2 results have shown a strong improvement, with an increase of 50 %+ yoy both for EBIT and NPAT (+ 14 % for revenues); this H2 improvement* seems to be mainly explained by a large price increase in Feb 23 by Ezy Strut,
(H1 23 results decreased, only due to the fact that H1 22 results were exceptional; H1 23 results were in line with H2 22),

- their main business is driven by infrastructure projects and electrification.
Unlike other companies which benefit from electrification (IPD Group, Excelsior Capital and SGEE) which are now at a 52 weeks high, Korvest seems to have been a bit forgotten by the market, with a limited increase of its share price YTD, while the stock looks cheap, with a PE 23 of 8 x and a free cash flow yield of 14 % (slightly explained by a decrease of its working capital, due to a return of a normal level of inventory).

Even if their business is probably cyclical, they seem to benefit from a good visibility on their business in the short term :
- in FY 24, they will benefit from a full year effect regarding the price increase (in Feb 23), while they expect that their infrastructure business will remain at a similar level than in FY 23,
- after H1 23, the company was indicating that "Korvest continues to see a strong pipeline of infrastructure opportunities over the next 3 to 5 years".
Based on its long term incentives (cf below), the company seems to target a stability of its EPS between FY 23 and FY 25.
It would correspond to a free cash flow of around 10 m AUD per year (if Capex remains flat) or a free cash flow yield of 11.5 %.
Before changes in working capital, free cash flow was 10 m+ AUD during the last 2 years.

Some other elements :
- long term incentives for employees mainly depend on aggregate EPS over 3 year period (3 year to 30/6/25) and average 3 year ROIC.
100 % of rights will vest if :
. aggregate EPS is 288 c or greater. It corresponds to an EPS of 96 c per year (flat vs EPS 23 of 96.7 c)
. and average 3 year ROIC (after tax) is 12 % or higher.

- the remuneration of the 4 key managers : fix between 210 k and 360 k. Total remuneration between 365 k and 669 k

- a bit disappointed by the limited level of shares owned together by executives and directors.
Only 3 % of total. Almost no purchase on market by them since FY 21. Progressively increase their holding via the company's share plan.

* gross margin : 38 % in H1 22, 34.5 % in H2 22, 34.6 % in H1 23 and 38.1 % in H2 23.