I have spent the last few days analyzing ACF's performance over the last 3 years in detail. I include my spreadsheet below for those interested, but for those who don't wish to get into that level of detail, here are my most significant conclusions from my analysis (must be read in conjunction with my notes below):
All of the following relates to the 3 years from FY21 to FY24 and growth rates are all CAGR over that period:
- EPS has increased at 51.8% pa CAGR. Would be higher if not for step tax increase in FY24.
- ROE has doubled in 3 years, from 10.5% to 21.1%. ROE for FY23 was higher than for FY24 due to the low tax rate prior to FY24.
- Weighted Average SOI have increased by 9.5% pa CAGR.
- Share-based Payments have increased by 13.4% pa CAGR.
- Share price has increased by 41.6% pa CAGR.
- EOFY market cap has increased by 56.9% pa CAGR.
- Dividends per share have increased by 41.4% pa CAGR.
- Acrow's P/E has fluctuated between 7.5 and 12.6, and is now in the middle of this range.
- Acrow is now a much higher quality company which should command a higher P/E. It has very high growth rates, has now reached a high level of profitability, and a market cap that now demands attention. It is uniquely able to continue its growth by transferring its much broader service offering to all States and Territories for years to come.
[Notes: All of the conclusions above are based on my own "normalised" NPAT, which subtracts Share-based Payments from ACF's normalised NPAT. These Share-based Payments occur every year. IMO these payments should not be ignored in normalised profit. I agree with ACF's other normalisations such as one-off acquisition expenses, as this gives a better guide to their underlying business performance, and likely future performance. I have also used the Weighted Average SOI for each FY in my calculations of EPS]
Here is the data I used for the above conclusions:
| | FY21 | FY22 | FY23 | FY24 | 3 Year CAGR |
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| 1 | EOFY Share Price ($) | $0.375 | $0.505 | $0.780 | $1.065 | 41.6% |
|---|
| 2 | Wtd Avge SOI (M) - WASOI | 217.6 | 248.5 | 261.9 | 285.9 | 9.5% |
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| 3 | EOFY SOI (M) | 219.4 | 253.0 | 266.3 | 301.4 | 11.2% |
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| 4 | EOFY Market Cap ($M) | $82.3 | $127.8 | $207.7 | $321.0 | 57.4% |
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| 5 | EOFY Total Equity ($M) | $61.5 | $83.3 | $102.9 | $141.0 | 31.8% |
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| 6 | EBITDA ($M) | $24.4 | $36.3 | $53.2 | $74.6 | 45.2% |
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| 7 | Profit Before Tax ($M) | $10.22 | $19.78 | $33.25 | $46.12 | 65.3% |
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| 8 | NPAT - ACF normalised ($M) | $8.71 | $17.81 | $30.49 | $33.00 | 55.9% |
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| 9 | Share Based Payments ($M) | $2.25 | $1.17 | $3.22 | $3.28 | 13.4% |
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| 10 | NPAT - Normalised - SBPayments ($M) | $6.47 | $16.65 | $27.27 | $29.72 | 66.3% |
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| 11 | EPS (cents) Norm. - SBP / WASOI | 2.97 | 6.70 | 10.41 | 10.40 | 51.8% |
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| 12 | DPS (cents) | 2 | 2.7 | 4.4 | 5.9 | 43.4% |
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| 13 | ROE (Norm - SBP) / Equity | 10.5% | 20.0% | 26.5% | 21.1% |
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| 14 | Historic P/E | 12.6 | 7.5 | 7.5 | 10.2 |
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PS: If you found the above analysis useful, please provide feedback (via upvote, great analysis and/or comments). That way, I will know if I should continue to share my analysis in future.
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