I believe, ACL should trade close to 16 times non-covid NPAT....

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ASX_Lottery

88 Posts.

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26/02/22

18:21

Post #: 59844902
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Originally posted by ASX_Lottery ↑

Due to covid, non-urgent operations were all ceased in many states - even with that non-covid testing increased by 2% which in itself is impressive.

They had non-covid rev of 258.2m$ last half. Medlab had no contribution in this.
EBIT margin came at 35.5% - a lot has to do with covid testing. Before medlab acquisition that was around 21%.
Medlab acquisition will give them scale, margin for non-covid revenue should be around 23-25%. Lets assume 23%.

Medlab had FY21 rev of 93m$. They are expecting 20m$ of EBIT from medlab acquisition for whole year from FY23.

Assuming 2.8% growth again for non-covid rev gives: 265m$ for the half
@ EBIT margin of 23% [taking the lower value]: 60.95m$ for the half.

They used to pay around 12m$ as interest payments - since now they have paid off their loan - inluding 4m$ a year anyways to count for small loans etc; that still gives 8m$ of savings which will go into EBIT increase.

extrapolating to the whole year, EBIT: 149.9 ~ 150m$ EBIT from non covid testing for the whole year. 30% tax: 45m$
NPAT: 105m$

This is with ZERO covid rev:
PE @ 4.73: 9.
Still ridiculously cheap for pretty much all medicare covered payments.

Add in all the revenue from covid testing
- WA today had more than 1000 cases - its like a virgin territory for covid. there will be plenty of rev to me made.
- still plenty of cases in eastern states.
- Covid testing will stay FOREEVER! - scale will change.
- international borders will open and taht will bring more cases.
- any new variant and it will go gangbusters.
- NON-covid revenue above is very conservative. It will definitely be more since now there will be no restrictions.
- generally australian population is getting older - more pathology testing.

PS: how is ur rocket on APX going?

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I believe, ACL should trade close to 16 times non-covid NPAT. that is valuation of around 1680m$, which equates to around 8.3$.
That should be a fair valuation.

ACL Price at posting: $4.73 Sentiment: Buy Disclosure: Held
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I believe, ACL should trade close to 16 times non-covid NPAT....

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I believe, ACL should trade close to 16 times non-covid NPAT....

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