PTB Group: Strong first half lifts our expectations

About the author:

Max Vickerson
Author name:
By Max Vickerson
Job title:
Date posted:
24 January 2022, 8:00 AM
Sectors Covered:
Industrials, New Energy

  • PTB Group (ASX:PTB) announced that its preliminary 1H22 exceeded its guidance by 12%.
  • The company has not increased its FY22 guidance but we are increasingly confident that it can maintain stronger growth from its US operations.
  • We therefore increase our target price to (login to view) and maintain our ADD rating.

US and Asia Pac driving solid performance

PTB has released some preliminary and un-audited financial data ahead of its expected release of its 1H22 results on 23 February that showed its Net Profit Before Tax and Foreign Exchange (NPBTFX) exceeded guidance by 12%.

The company pointed to strong trading conditions in the US and Asia-Pacific but has not yet lifted its full year guidance despite the strong 1H result.


PTB’s preliminary 1H22 results showed revenue growth in-line with our expectations but a 2% beat on our forecast EBITDA and NPBTFX.

We will need to see the release of results to understand the divisional breakdown but we anticipate that the 18 additional contracted engines (~8% increase) in the Maldives and streamlining of the US operations will have been important drivers of the result.

Forecast and valuation update

We expect the second half to build on 1H and therefore lift our FY22 underlying net profit forecast to $9.5m (+3%) and FY23 to $9.4m (+5%).

We think PTB can continue to achieve steady organic growth in the US and from the Maldives in the next two years but it also has the potential for incremental M&A. There was over $20m in cash on the balance sheet as at 30 June 2021 and strong cash flows which we think means an acquisition of $5m - $10m would be achievable.

Investment view

Even without considering acquisition opportunities for the company we see upside to the current share price with potential 12-m TSR of 11% (+8% capital growth, 3% dividend yield) and a P/E multiple less than 14x.

If PTB could find an incremental investment opportunity with a similar rate of return (forecast ROE ~9.4%) to its business then, assuming a $10m bolt-on acquisition, we think it could easily add an additional 14cps of value.

We maintain our ADD rating given the upside we see and the potential for additional growth.

Price catalyst

More detail on the divisional performance at the half year result could identify potential outperformance in 2H and/or in FY23.

Tourism statistics from the Maldives peak season over Dec – Feb will give an indication of how strong the second half will be for the Australian-based business.


Customer traffic, particularly with PTB’s largest customer in the Maldives.

Roll out of the engine management program in the US. 

Impacts on COVID-19 on general aviation.

Interest rates.

Tax regimes.

Availability of third party financing to grow leasing fleet.

Find out more

Download full research note

If you would like access or more information, please contact your adviser or nearest Morgans office.

Request a call  Find local branch

Need access to our research?

You are also welcome to start a two-week trial of our online platform, which provides access to detailed market analysis and insights, provided by our award-winning research team

Create trial account 

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.

Solid top-line outcome: BAP’s 1Q22 revenue was flat on the pcp, an extremely resilient result given the extent of lockdowns in the period (~70% of stores impacted) and the strength of the pcp (cycling 27% growth). Composition comprised: Trade +2%; NZ -10%; Retail -12%; and Specialist Wholesale +7%. Overall, BAP stated that non-lockdown areas are outperforming expectations. ▪ 1Q22 trade & retail: Trade/Burson revenue was up +2% on the pcp (LFL sales - 1%; cycling 8% pcp); NZ/BNT revenue was down -10% (LFL sales -15%; cycling +4%); and Retail/Autobarn revenue was down -12% (LFL sales -16%; cycling +36%). Within the Retail segment, online sales were +80% on the pcp. Stores percentages impacted by lockdown were: Trade 70%; NZ 100%; and Retail 50%. ▪ Specialist segment results: Specialist wholesale revenue is up 7% on pcp, with Auto electrical/Truckline divisions ‘performing strongly’; and WANO underperforming. ▪ GM pressure expected to be temporary: BAP stated GM was stable across Wholesale and NZ (45% of FY21 revenue); and down ~50bps Trade and Retail (~55% of FY21 revenue), driven by promotional and online pricing in lockdown areas (we assume no margin pressure witnessed in non-lockdown areas). BAP expect margins to revert once lockdowns ease. ▪ The cost base has increased vs pcp, a function of duplicated DC costs (commencement of new VIC DC), and higher group and team member support (covid related) costs. BAP noted FY22 store rollouts and refurbs are on track.

  • Print this page
  • Copy Link