key points from Bell Potter Research: Capital raising complete, timing right for rollout With Servcorp’s $80m capital raising complete, far greater disclosure on the Virtual Office growth strategy and deals/incentives for signing grade A office leases near an all time high, we have moved Servcorp to a Buy with a $4.95 price target. Weak FY10, but small format floor growth has low execution risk Investment in new floor growth is lower risk than historic growth given the new format is a quarter of the capex and half the operating costs (ex lease).
Trading at a 30% discount to mkt on mature FY12 earnings
Valuation: price target raised to $4.95 Our $4.95 price target is the mid-point of our EV/EBIT and PE valuation methodologies applying mid cycle earnings multiples.
SRV Price at posting:
$4.50 Sentiment: None Disclosure: Held
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