Best calls to action – Wednesday, 25 August
About the author:
- Author name:
- By Andrew Tang
- Job title:
- Analyst - Equity Strategy
- Date posted:
- 25 August 2021, 6:00 AM
- Sectors Covered:
- Equity Strategy and Quant
Ansell - FY21 a dynamic year, but now much better positioned
FY21 was in line with guidance, albeit below our expectations, with record organic sales and underlying earnings growth driven via unprecedented PPE demand. Healthcare increased scale on COVID gains, high efficiency new manufacturing and account wins, while Industrial captured market share on multirange products.
While FY22 guidance is wide (NPAT -9% to +2%) as short term risks remain (eg demand/supply imbalances; swings in inputs cost/logistics; closures/reduced ops in South East Asia on COVID Delta spread; CEO transition), we continue to believe the rebased business is in a much stronger position over the medium/longer term.
We adjust FY22-23 estimates, with our DCF/SOTP price target decreasing. Add.
Read our full reports and latest price targets on ASX:ANN here.
HUB24 Ltd - Flows trump revenue margin
HUB reported in line with expectations: underlying EBITDA A$36.2m (+47% on pcp) and underlying FY21 NPAT A$15m, +% on pcp. Platform retail revenue margin contracted more than expected. HUB stated that the Admin fee pricing environment is stable and op margin expansion is expected.
FY22 has commenced strongly with implied net inflows of ~A$1.6bn FYTD, a run-rate +100% on the pcp and +10% on 4Q21. Net inflow momentum supports HUB's FY23 FUA target of A$63-70bn (+60% over two-years from A$41.4bn).
We move back to taking a long-term view on HUB and upgrade to Add. Capturing the industry structural change and delivering operating leverage via scale is the base case over the next five years. Benefitting further from potential private label opportunities, transitions and industry consolidation is potential upside.
Read our full reports and latest price targets on ASX:HUB here.
Superloop - Doubled EBITDA in 21 and will do so again in 22
SLC's FY21 result was in line with our expectations. On a continuing business basis revenue grew 14% and underlying EBITDA grew 108%. 94% of revenue is now recurring and 94% of sales signed in FY21 has a >2 year tenure. Each year SLC accelerates the growth of its higher quality, high margin fibre business.
We have layered meaningful costs into our FY22 forecast (investing for growth) and still think our FY22 forecast looks comfortably achievable. Add retained.
Read our full reports and latest price targets on ASX:SLC here.
Aerometrex Limited - Leaving 1H turbulence in the rear mirror
With expectations rebased following AMX's mid-June guidance update, AMX has produced a FY21 result at the top end of guidance and ahead of MorgansF. AMX continues to show promising growth in the MetroMap subscription product, with period end ARR of $4.81m +189% on pcp (+13% on Mar Q) and 7% ahead of MorgansF.
AMX is confident of converting a portion of lost project revenue to subscription, with MetroMap 3.0 to feature UX enhancements. The 3D opportunity in the US remains largely nascent, with AMX disclosing a $1.3m spend in the US in FY21 to establish their footprint. Delivery of the Google order, opening of a 3D store and a US based advisory board, should aid growth in this large market.
Despite revenue downgrades from cessation of project work, our valuation/TP reduces a modest 3.6%. We retain the Add rating on AMX, seeing the risk/reward tradeoff as attractive as AMX targets opportunities which could lead to a step change in the earnings profile.
Read our full reports and latest price targets on ASX:AMX here.
Monash IVF Group Ltd - Positive trends likely to continue
MVF posted strong FY21 results with strong industry trends as a beneficiary of COVID with behavioural change in priorities towards families expected to continue. Continued strategic investment in marketing, technology, research and expanding clinic infrastructure to extend capacity and remain well positioned amongst competitors.
We have made only minor changes to forecasts and use higher market multiples. With ~11% TSR on offer to shareholders (includes 4.8% FF yield) we have maintained our Add recommendation.
Read our full reports and latest price targets on ASX:MVF here.
Virtus Health Ltd - Strategic play
VRT reported strong FY21 results ahead of our forecasts with continued strength in cycle volumes in Australia and internationally and expects demand for ARS to continue in FY22.
VRT continues to focus on strategic growth and has announced a binding agreement to acquire Healius' Adora facilities (4 fertility clinics and 3 day hospitals) for $45m and expected to complete in 2Q22. To fund the acquisition, a A$35m placement has been undertaken. We have raised our forecasts to account for the acquisition. Add maintained with a 10% TSR.
Read our full reports and latest price targets on ASX:VRT here.
Viva Energy Group - Shows off solid discipline
A strong 1H21 result largely in line with our expectations. Underlying EBITDA (RC) of A$256m +% yoy, and NPAT A$112m. Showing it thinks about investors, VEA 1) gave more segment detail, 2) applied AASB16 to get EBITDA closer to cash flow, and 3) altered its dividend policy.
Good recovery across all segments, with a surprise outperformance from Commercial (driven by bulk and specialty products with aviation/marine still weak). We maintain our ADD rating.
Read our full reports and latest price targets on ASX:VEA here.
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You can find further detailed analysis of company results this reporting season by browsing our reporting season tag, and view a full list of upcoming results on our Reporting Season Calendar.
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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.