Ann: Mader welcomes strategic investor & reaffirms FY24 guidance, page-11

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dykam11

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11/07/24

12:06

Post #: 74706216
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Originally posted by g41: ↑

Bells forecasting growth down to 17% 2026:

Mader Group (MAD)

All out of bubble gum

Recommendation
Buy (unchanged)
Price
$6.21
Target (12 months)
$7.60 (unchanged)

Analyst
Joseph House 613 9235 1624

Authorisation
Jonathan Snape 613 9235 1601

GICS Sector
Commercial Services and Suppliers

Expected Return
Capital growth 22.4%
Dividend yield 1.5%
Total expected return 23.9%
Company Data & Ratios
Enterprise value $1,285m
Market cap $1,242m
Issued capital 200m
Free float 23.4%
Avg. daily val. (52wk) $1.2m
12 month price range $4.10-7.99

Price Performance

BELL POTTER SECURITIES LIMITED
ABN 25 006 390 772
AFSL 243480
DISCLAIMER:
THIS REPORT MUST BE READ WITH THE DISCLAIMER ON PAGE 9 THAT FORMS PART OF IT.

Page 1

(1m) (3m) (12m)
Price (A$) 6.23 6.58 4.25
Absolute (%)-0.3-5.6 46.1
Rel market (%) 0.1-10.1 37.9
Growth momentum to continue… Here’s why
In this report, we have reviewed industry and company data that reinforces our
earnings growth expectations for MAD. Key points:
Australian iron ore production growth: The Australian Government is forecasting
growth in Australian iron ore production over FY23-28 at a CAGR of 2.2% pa, ahead of
the historical 5-year CAGR (FY18-23) of 1.2% pa. This acceleration in growth would
likely generate further expansion in Heavy Mobile Equipment fleets, enhancing R&M
demand and component consumption.
Metal ore capital expenditures at record levels: Equipment, plant and machinery
capital expenditure across metal ore mining is currently at a record (FY24 annualised
capital expenditure is $8.7b), significantly exceeding levels reported during the 2012
mining boom. Steadily rising capital expenditures from FY17-23 (from $3.2b to $7.6b)
has led to an increase in machine stock, and with higher R&M intensity across ageing
fleet, we expect R&M demand will remain robust in the short to medium term.
Ability to grow revenue in a declining & low iron ore price environment: As we
emphasise in this report, MAD’s Australian segment and Seven Group’s (SVW, Buy,
TP$44.30/sh) WesTrac have historically demonstrated meaningful YoY revenue
growth during declining and low iron ore price environments. This dynamic is
supported by the fact that these businesses are leveraged to mining activity (or
production volume growth) in a market that hosts the lowest-cost iron ore producers.
We have only considered the iron ore market in our analysis, MAD’s largest commodity
exposure in Australia. It is worth noting that current record Australian gold prices and
resilient thermal coal prices are expected to support mining activity in those markets.
We make no changes to our forecasts and valuation in this report.
Investment thesis: Buy; TP$7.60/sh (unchanged)
MAD’s near-to-medium term outlook is supported by growing Australian iron ore
production and record high A$ gold prices. In North America, we expect a return in
strong growth rates as further technicians are mobilised in Canada over FY24-25.
Absolute Price Earnings Forecast

Year ending 30 June 2023a 2024e 2025e 2026e
Sales (A$m) 609 790 961 1,090
EBITDA (A$m) 75 103 132 153
NPAT (reported) (A$m) 39 53 69 81
NPAT (adjusted) (A$m) 39 53 69 81
EPS (adjusted) (¢ps) 19.3 26.4 34.6 40.5
EPS growth (%) 48% 37% 31% 17%
PER (x) 32.3x 23.5x 17.9x 15.3x
FCF Yield (%) 0% 2% 3% 5%
EV/EBITDA (x) 17.1x 12.4x 9.7x 8.4x
Dividend (¢ps) 5.8 8.1 10.4 12.1
Yield (%) 1% 1% 2% 2%
Franking (%) 100% 100% 100% 100%
ROE (%) 38% 38% 38% 34%

Expand

bell potter 790m sales forecast in the high side? the company guide to at least 770m. struggling to meet expectation?

MAD Price at posting: $5.89 Sentiment: Buy Disclosure: Held
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0 Great analysis

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(20min delay)
Last $6.75		Change 0.080(1.20%)		Mkt cap ! $1.362B

Open	High	Low	Value	Volume
$6.67	$6.77	$6.65	$1.109M	165.3K

Buyers (Bids)

No.	Vol.	Price($)
1	2299	$6.71

Sellers (Offers)

Price($)	Vol.	No.
$6.75	7887	4

View Market Depth

No.	Vol.	Price($)
1	2299	6.710
2	894	6.700
2	1294	6.690
1	452	6.670
1	452	6.660

Price($)	Vol.	No.
6.750	7887	4
6.780	5727	3
6.800	650	2
6.840	1650	1
6.850	1000	1

Last trade - 16.10pm 11/11/2024 (20 minute delay)

MAD (ASX) Chart

Ann: Mader welcomes strategic investor & reaffirms FY24 guidance, page-11

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Ann: Mader welcomes strategic investor & reaffirms FY24 guidance, page-11

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