high conviction pick for next 12-24 months

I have been buying consistently and now have a very meaningful position personally and in super
I have concluded that the next 1-3 years will see FWD revenue , EBITDA and NPAT lift materially.
The Perdamen project is moving ahead and is due to commence soon . They are even looking to build accommodation for permanent staff in a few years time. This with other projects ( Dampier Pier , Woodside needs etc) should lift Community solutions to near 100% utilization and even possibly above. This will in turn drive earnings materially higher for at least 2-3 years
At the same time i think we will see many more social housing wins that will also drive EBITDA from Building solutions much higher.

The EBITDA and NPAT lift will be massive when one compares current market cap of 160 and EV of 140 m odd. The business could be trading at EV to EBITDA of 2.5 which is ridiculously cheap.and must adjust upward on any EBITDA lift. The rio contract is yet to reflect in the numbers so last half numbers won't reflect outlook at all.

Moreover, the property portfolio asset base FWD have is substantial , particular the replacement value which is much much higher than book value.. Simply no more land strategically positioned where Searipple is.

What is painfully obvious to me at least, even with 60% utilization of searipple which is the RIO contract and bits and pieces, community solutions will generate a mid 20s to high 20- EBITDA. Interestingly I recently did a deep dive into one of the broker reports which was projecting mid 20s earnings and divi over next 24 months, and amazingly this was with utilization rates of 57% ( 24/25) 60% 25/26 and then 63%. Its clear that higher utilization ( which in my opinion is an extremely higher probability ) will see EPS and DPS be closer to the 30c to mid 40c range ( when one adds some contribution from Building solutions)

The risk to upside here is big, and any announcement of Community solutions contracts, particular bigger ones ( Perdamen /Dampier Pier) are very material and volume traded is light , so I think it's wise to be set before news. This is what i have done

The business also has substantial franking credits pool, so i expect the big dividends to be fully franked. I honestly think 90c in Divi over next three years is realistic and if FF, these have a grossed up value closer to 1.28. When one compares this to current SP of 1.62, it's even more amazing. Of course as EBITDA, NPATA and Divi move up substantially, i also expect to see a material rerating in SP so i think it will be a double whammy of returns

I believe we are in for an very positive 3 years