KOV

1.48%

$8.89 korvest ltd

Ann: Press release FY21 results, page-4

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lewis59

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23/07/21

12:06

Post #: 54718773
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Originally posted by madamswer: ↑

"Very strong second half. Justifies recent price strength. Further capacity increases planned to cope with the pipeline. All good."

All good indeed.

The result, and more significantly, the accompanying commentary, justify not just the recent price strength but also that price strength continuing.

Key takeaways for me were the references to:

- "unprecedented levels of large project work",
- "record work on hand" currently,
- "buoyant general market",
- "investment will continue to be focussed (sic) on improvements to factory capacity and capability", and
- price increases in April and August to recover increased raw material costs

That all reads to me very much like a very tight market which portends the golden trifecta of increased volumes, prices and margins, as well.

So while the JH2021 result (represented by the dark grey bar) was a cracker, I am confident that the next two half year's (represented by he blue bars) will be even better:

View attachment 3398402
[Note: Excludes NRI's, such as Jobkeeper support receipts]

Even at that modest NPAT improvement (which I sense will prove to be conservative) reflected in the chart over the coming halves, it means FY2022 NPAT of $7m, equivalent to EPS of 62c.

That places the stock on a P/E of just 9.3x.

And remember that the company is sitting on $6.7m in net cash at the end of FY2021, which will surely grow to closer to $8m (~70cps) by the end of FY2022.

Therefore, on a net cash-adjusted basis, the prospective P/E multiple is more like 8.2x

So while the stock price has appreciated strongly going into this result, I still think there is meaningful further capital upside.
(Oh, plus a >7% fully franked dividend yield along the way.)

.

Expand

Thank you for those thoughts. My own rough calculations have an EPS for FY22 at 67cents. I don't think 12x is too demanding a multiple so $8 is my 12 month price expectation. Not that I would be a seller at that price - I'm getting used to the strong dividend and I like the company's honest communication.

KOV Price at posting: $5.95 Sentiment: Hold Disclosure: Held
2 Upvote

0 Great analysis

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(20min delay)
Last $8.89		Change 0.130(1.48%)		Mkt cap ! $103.8M

Open	High	Low	Value	Volume
$8.88	$8.92	$8.88	$8.364K	941

Buyers (Bids)

No.	Vol.	Price($)
1	2000	$8.80

Sellers (Offers)

Price($)	Vol.	No.
$8.89	1000	1

View Market Depth

No.	Vol.	Price($)
1	2000	8.800
3	5085	8.760
2	2812	8.750
1	574	8.730
1	250	8.700

Price($)	Vol.	No.
8.890	1000	1
9.000	1444	2
9.030	1012	1
9.130	2393	1
9.200	60	1

Last trade - 10.26am 28/06/2024 (20 minute delay)

KOV (ASX) Chart

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