While the devil is always in the detail, making it difficult to...

While the devil is always in the detail, making it difficult to form any firm view of the true quality of the result until the full set of accounts are published, it does look like a reasonable result in the second-half, with second-half EBIT still showing growth (+5%, compared to 8% in the first-half) in what was clearly a period of tough economic conditions.

So, another demonstration of the resilience of the business, I think, especially since the company has this year been cycling strong growth levels of comparative periods (namely, 27% growth in DH2017 and 17% growth in JH2018):

Half-Yearly EBIT (Growth on pcp):
DH2017:  $5.58m  (+27%)
JH2018:  $6.42m (+17%)
DH2018:  $6.04m (+8%)
JH2019:  $6.76m (+5%)


Based on both the empirical and anecdotal evidence, the six-months to June 2019 was a period of tough economic conditions (slowing housing market, uncertainty around Federal election outcome), which means the current reporting season is likely to be one that disappoints in terms of earnings performance of companies with domestically-focused businesses (witness the disappointing results of two early reporting companies, GUD and ABC, which can be seen as barometers for the overall economy.)

I suspect that by the time reporting season is over, this SNL result will look very good, compared to what is likely to transpire in terms of earnings results from the bulk of companies.


To the all-important subject of valuation, while I expect the market will become increasingly willing to pay up for earnings certainty in coming months (and SNL certainly offers that), it looks to me like it is already doing so, to a large extent, in SNL's case, with 12-month prospective P/E of 17.5x, EV/EBITDA of 11x and FCF Yield of around 5%.
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