Results Road Map: Thursday, 27 August

About the author:

Andrew Tang
Author name:
By Andrew Tang
Job title:
Analyst - Equity Strategy
Date posted:
27 August 2020, 12:44 PM
Sectors Covered:
Equity Strategy and Quant

Jumbo Interactive

The focus shifts to Powered By Jumbo

Jumbo Interactive's (ASX:JIN) FY20 result exceeded recent guidance across the board and was a strong outcome given the significantly weaker jackpot environment.

Customer spending levels are currently elevated, and we believe COVID-19 will continue to accelerate the digital take-up by both consumers and charities which positions JIN well for FY21 and beyond.

Management reiterated their aspirational $1b TTV level in FY22 which, if achieved, would result in substantial upgrades to earnings forecasts post FY22.

Following earnings revisions our target price increases and given the strong outlook over the next few years for the stock, we retain an Add rating – view target price and full analysis (Morgans clients only). 

Eagers Automotive

A clear bridge to much higher profit

Eagers Automotive (ASX:APE) 1H20 underlying NPBT was in line with recent guidance - a solid outcome all things considered.

APE reiterated its A$78m structural cost-out program which will materially enhance the group's ability to navigate any future uncertainty and also provide strong leverage to any eventual uptick in trading. Following today's result disclosure, we now see a shorter bridge to materially higher profitability.

Additionally, we forecast APE will exit FY20 in a negligible net debt position (potentially net cash).

We see at least 18 months of strong growth ahead, backed by a rock solid balance sheet, cost-out and a clear set of strategic priorities. Add maintained – view target price and full analysis (Morgans clients only). 


A solid result overall

MoneyMe's (ASX:MME) FY20 result was well ahead of expectations at both EBITDA and NPAT.

Overall, we saw this as a solid full year result, with MME beating nearly all key prospectus metrics.

We raise our FY21F/FY22F Cash NPAT by over 100%/50% on improved margin assumptions/better operating leverage.

We move to a 100% DCF weighting for our valuation and our PT is raised.

We anticipate the recent product launches into new key verticals accompanied with the potential drop in funding costs from the expected new warehouse facility (1Q21 end) will provide tailwinds for MME's loan growth/profitability in the medium term.

Add maintained – view target price and full analysis (Morgans clients only). 

Accent Group

Online investment paying dividends

Accent Group's (ASX:AX1) FY20 EBITDA result was in line with recent guidance, +11.8% yoy.

The strength of AX1's online capability was on show in FY20, increasing by 140% in the 4Q and into early FY21, with a run-rate of 35% of sales.

AX1 is in a comfortable BS position with ND/EBITDA at 0.3x and no major working capital rebuild requirements/deferrals looming.

The early part of FY21 has seen sales impacted by increased lockdown restrictions in VIC/Auckland (group LFL sales growth +1.3% in the first 8 weeks), however excluding these markets LFL's are up a very healthy 16.6%.

The COVID playbook suggests to us that the sales deficits in these two markets should come back quickly when restrictions ease. FY21 store rollout guidance, a reasonable LFL sales growth assumption, modest GM expansion and contained CODB should see the company well placed to deliver a further 10% EPS growth in FY21.

Add maintained – view target price and full analysis (Morgans clients only). 

Acrow Formwork

Building momentum

Acrow Formwork's (ASX:ACF) FY20 result overall (pre-AASB16) was ahead of expectations.

Key positives:

  • Improved Natform performance in 2H20
  • Outlook remains strong with the current pipeline of hire opportunities up 63% on FY19 levels

Key negatives:

  • Commercial & Residential Scaffold revenue fell 17% and remains under some pressure due to COVID-19 restrictions
  • DPS was below our forecast

FY21F underlying EBITDA rises by 28% to A$22.4m due to AASB16 adjustments.

On a pre-AASB16 basis our forecast remains unchanged at A$17.5m.

Maintain Add rating on a higher – view target price and full analysis (Morgans clients only). 

We think management continues to execute well with a solid growth outlook.


Balance sheet flexibility

Cardno (ASX:CDD) reported FY20 EBITDA of $43m which was at the top end of recently provided guidance as the Americas division offset ongoing weakness witnessed in APAC.

The company has guided to FY21 EBITDA (pre-AASB16) of between $40m and $45m which compares to our revised forecast of $42.7m.

With both capital management and acquisitions expected, and given the low valuation multiples currently ascribed to the stock, we retain an Add rating – view target price and full analysis (Morgans clients only). 

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Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.

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