PPE (ASX) Ann: Investor Presentation

Originally posted by XHY: ↑
Ord Minnett is even more optimistic than Morgans
Company Result
PeopleInfrastructure Limited (PPE)

.

Last Price:A$3.30
Valuation:A$4.73 (under review)
Recommendation:Buy(under review)
Risk Assessment:Higher

Event: 1H21 Result
PPE have reported underlying EBITDA of $21m, well above OMLe and consensus as the business experienced a sharp rebound from Covid.
Revenue of $201m was 3% ahead of 1H20 and 5% better than OMLe, though this included $13.8m of jobkeeper. $10.1m of this was passed through to contracted employees, while $3.1m was retained (paid to internal employees).
Costs were well controlled, and broadly in line with the pcp.
Headline cash flow conversion was weak, however was largely attributable to the repayment of payroll, GST and income tax deferrals related to Covid support. Excluding this implies GOCF conversion of ~68% (OMLe), which while still soft, is in line with prior periods. In the past this has been due to delayed collections over the Christmas/New Year period and has been caught up in the 2H.
The balance sheet remains in good shape with $26.7m of cash, the company has separately called out that it maintains up to $70m of acquisition capacity.
A fully franked dividend of 4.5cps was declared.
FY21 guidance was further provided, with $35m - $37m implying an upgrade to consensus of ~20% at the midpoint.

1H20A
1H21A
%∆pcp
FY20e
%∆pcp
Total Revenue
194.8
201.0
3.1%
191.5
4.9%

Operating expenses
-180.8
-180.0
-0.5%
-177.4
1.5%

Operating EBITDA
14.1
21.0
49.3%
14.2
48.3%
% margin
7.2%
10.4%
44.8%
7.4%
41.3%

Underlying D&A
-1.4
-1.3
-8.1%
-1.1
11.9%
Operating EBIT
12.7
19.7
55.5%
13.0
51.4%

Net interest
-1.2
-0.7
-41.8%
-0.7
6.8%
PBT
11.5
19.0
65.7%
12.4
53.8%

Tax
-2.5
-5.4
118.6%
-3.1
72.7%
NPATA
9.0
13.6
51.3%
9.2
47.4%
dps
4.0
4.5
12.5%
4.5
0.0%

Comments:
Significant parts of the PPE business have shown strong resilience in the face of Covid, with community services and industrial hours both up 20% on 1H20, despite the existence of Covid.
Nursing was acutely affected during the peak of Covid, however it too is now rebounded strongly with billed hours up 40% on 2H20.
The IT business has been the natural laggard, as it’s traditional Melbourne focus limited hiring activity in the 1H. Momentum is returning in 2H21 however.
Overall the strength of the upgrade points to the pace of the rebound across the business more broadly, and the various growth markets the company is operating in (disability care, aged care, infrastructure, IT contracting).

Investment view:

The majority of PPE’s business is exposed to markets with defensive characteristics, yet retain growth opportunities. Even in athose markets that would traditionally be viewed as more cyclical (general staffing), PPE has been able to deliver a strong outcome. We believe this organic growth can continue, while the balance sheet exists to augment this growth via accretive acquisitions.
As usual, our price target and recommendation are under review.
Expand
They raised it to $5.03

No.	Vol.	Price($)
2	39812	90.5¢

No.

Vol.

Price($)

39812

90.5¢

Price($)	Vol.	No.
92.0¢	12018	6

Price($)

Vol.

No.

92.0¢

12018

No.	Vol.	Price($)
2	39812	0.905
4	7170	0.900
2	8000	0.895
3	4723	0.890
1	3000	0.885

No.

Vol.

Price($)

39812

0.905

7170

0.900

8000

0.895

4723

0.890

3000

0.885

Price($)	Vol.	No.
0.920	12018	6
0.925	3500	2
0.930	8000	2
0.935	3000	1
0.940	34761	3

Price($)

Vol.

No.

0.920

12018

0.925

3500

0.930

8000

0.935

3000

0.940

34761

(20min delay)
Last 91.0¢		Change 0.005(0.55%)		Mkt cap ! $94.53M

Open	High	Low	Value	Volume
91.0¢	91.0¢	91.0¢	$2.532K	2.782K

Ann: Investor Presentation, page-26

Pilot Energy awarded $6.5M in govt funding for Mid West Clean Energy Project

Macro Metals picks up 80% in Firebird's manganese plays; mining services operations to launch if decision to mine passed

Drilling at Lady Ilse suggests gold-copper porphyry, grows footprint for Magmatic

NYSE-listed Alcoa Corp joins ASX through key JV acquisition

Lithium production up 26%, revenue jumps 58% in June quarter for Pilbara

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Ann: Investor Presentation, page-26

Top Stories

Pilot Energy awarded $6.5M in govt funding for Mid West Clean Energy Project

Macro Metals picks up 80% in Firebird's manganese plays; mining services operations to launch if decision to mine passed

Drilling at Lady Ilse suggests gold-copper porphyry, grows footprint for Magmatic

NYSE-listed Alcoa Corp joins ASX through key JV acquisition

Lithium production up 26%, revenue jumps 58% in June quarter for Pilbara

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News