Best calls to action – Friday, 27 August
About the author:
- Author name:
- By Andrew Tang
- Job title:
- Analyst - Equity Strategy
- Date posted:
- 27 August 2021, 6:00 AM
- Sectors Covered:
- Equity Strategy and Quant
Tyro Payments - Navigating a tough year relatively well
TYR's FY21 result was noisy with one-off costs (-A$14m) heavily impacting reported numbers. While the reported NPAT loss of -A$29m was comfortably below consensus (-A$12m), the normalised NPAT result (-A$10m) was more in-line.
We think the underlying result detail showed a relatively solid FY21 performance overall, with the highlight being TYR producing a normalised EBITDA of +A$14m, well up on the pcp (-A$4m). We upgrade our TYR FY22F EPS by >10% (off a low base), while FY23F EPS is largely unchanged in absolute terms. Our earnings changes reflect a lift in sales and EBITDA margin assumptions.
We continue to like the TYR growth story, with its medium-term potential for further market share gains and structural payment tailwinds key to our investment thesis. We maintain our ADD recommendation.
Read our full reports and latest price targets on ASX:TYR here.
Whitehaven Coal - Cash tsunami on approach
FY21 operating financials were in-line, but operating cashflow fell modestly short. FY22 sales guidance was a touch weaker than expected, but flat cost guidance was a highlight. Seaborne thermal coal markets look strong into CY22 on a confluence of factors including a Chinese domestic supply crisis.
Clear upside risk to shareholder returns linked to WHC's strong cashflow leverage remains compelling.
Read our full reports and latest price targets on ASX:WHC here.
Home Consortium - Ready to accelerate AUM
HMC has transitioned to a capital light model (total AUM at $2.5bn) and is in a strong position to grow AUM across both its current vehicles and new opportunities. With the impending IPO of HealthCo (HCW) on 6 September, HMC will execute on another significant strategic milestone.
Post HCW listing, HMC will have ~$950m of liquidity available to support its growth. FY22 FFO guidance has been set implying +35% growth on the pcp. DPS is 12cps. HMC expects to be very active on dealflow with management confident it will reach +$5bn in AUM by the end of 2022 and +$10bn by the end of 2024.
HMC is also considering simplifying its structure via a de-stapling (subject to vote). We retain an Add rating.
Read our full reports and latest price targets on ASX:HMC here.
Ramelius Resources - FY21 breaks all records
FY21 financials highlight a record year on almost all metrics for RMS. 2.5cps fully franked dividend declared (+25% YoY and above our estimate).
We maintain an add rating.
Read our full reports and latest price targets on ASX:RMS here.
Maas Group Holdings - Foundation set for a strong FY22
MGH delivered a strong FY21 result, which was in line with our forecasts and at the upper end of guidance. FY22 outlook commentary was positive and consistent with our expectations.
We forecast the combination of recent acquisitions (A$22m EBITDA) and organic growth drivers to deliver FY22 EBITDA of A$120.0m (+58.2% yoy). Stronger underlying performance and the recent residential property acquisition has seen our FY22/23/24 EBITDA forecasts increase 1.7%/3.5%/2.6%, while NPAT -2.1% in FY22 (higher net interest) and +3.5%/+2.6% in FY23/24.
With a strong growth outlook and M&A optionality, we continue to view MGH as attractively priced. Add rating maintained.
Read our full reports and latest price targets on ASX:MGH here.
Peopleinfrastructure - Can't keep the People locked down
PPE delivered a strong FY21 result, which came in 3.8% ahead of the top-end of guidance. The annualised 2H21 result (cA$34m EBITDA) highlighted the sustainable base from which the business will grow, with organic growth and an incremental ~A$9m in EBITDA from recently completed acquisitions on top.
Outlook commentary was positive and management expects its 2H21 momentum will continue into FY22. Growth in specific businesses will offset the near-term impact from restrictions in NSW/VIC. M&A remains on the agenda.
We continue to view PPE's valuation as attractive, in light of its strong growth outlook and upside from further accretive M&A. Add maintained.
Read our full reports and latest price targets on ASX:PPE here.
Earlypay Ltd - Early post-covid momentum about to pay off
EPY reported underlying NPATA of A$8.7m, up 3.6% on the pcp and in-line with guidance. 2H21 NPATA of A$5.2m was up 46% on 1H21. EPY experienced momentum into 4Q, with a step up Invoice Finance (IF) TTV and lease originations; and a small net increase in Invoice Finance clients.
FY22 NPATA guidance was provided for +40% growth (implied +A$12.2m NPATA), which is substantially supported by annualising 4Q21 profitability. EPY has showed its business to be relatively resilient and has returned to delivering growth, which we view as attractive versus a 10x PE (as a base case).
If the group can prove that its technology-led strategy can deliver sustainable client growth, we expect a multiple re-rating to be achieved on a higher earnings base.
Read our full reports and latest price targets on ASX:EPY here.
Ai-Media Technologie - The one stop all inclusions shop
AIM's FY21 result was ahead of prospectus and slightly better than we had anticipated. Numbers were bolstered through acquisitions, but pleasingly the result was also a beat on an organic basis. AIM is now strongly free cash generative.
Following the completion of the EEG acquisition in FY21; AIM's business model has been refined to offer a more holistic solutions set. It is global and has three tiers - automated (Lexi), semi-automated (Smart Lexi), and premium (Ai-Live).
AIM is unique in that it now covers the full spectrum for captioning and translation. AIM's mission is to make the world's content accessible for everyone. Their tech solutions set, customer base and footprint position them well on this front. Good mission, execution and outlook, plus upside risk to earnings. ADD retained.
Read our full reports and latest price targets on ASX:AIM here.
Control Bionics - Expanding the business
CBL posted its FY21 results which exceeded our forecasts, recording higher revenue and lower costs. CBL is well cashed up to continue its investment in further product development and sales and marketing expansion.
Recent distributor appointments will help entry into Singapore and several key states in the US. These distribution arrangements compliment a growing direct sales team. We have had a closer look at two comparable companies Swedish based Tobii Dynavox and Ohio based Prentke Romich Company which service the same markets.
In our view there are significant expansion opportunities for CBL. We maintain our Speculative Buy recommendation.
Read our full reports and latest price targets on ASX:CBL here.
Antisense Therapeut. - Big year, but even bigger one ahead
FY21 marked a preparatory but pivotal year with significant regulatory advancements, trial-ready API manufacture, and board maturation in-line with the progression to a late-stage trial development and commercialisation company.
ANP reported its full-year results and continues to track in-line with our forecasts as regulatory preparations and trial arrangements progress.
No material news was provided in the report although we expect activity to pick up over the next six months as catalysts draw near including: 1) PIP/EMA submissions; 2) complete response to the FDA partial clinical hold; 3) expansion of the indication pipeline; and 4) potential licensing / funding arrangements. Given the pipeline of news ahead, FY22 is shaping up to be a big year and look to add to positions as the DMD program progresses.
We retain our Speculative Buy recommendation.
Read our full reports and latest price targets on ASX:API here.
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Disclaimer: Analyst may own shares. 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.