PWR Holdings Limited: Setting the business up for the long term

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Alex Lu
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By Alex Lu
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Date posted:
18 August 2023, 10:30 AM
Sectors Covered:

  • PWR Holdings Limited's (ASX:PWH) FY23 result overall was largely in line with expectations.
  • Divisional revenue growth: Motorsports +16%, Aftermarket +15%, Emerging Technologies +14%, OEM +22%.
  • Key positives: Aerospace & Defence revenue jumped 48% with a stronger pipeline compared to the prior year; Balance sheet remains healthy with net cash (ex-leases) of $17.6m.
  • Key negatives: Normalised EBITDA margin was down 160bp to 33.8% due mainly to higher labour costs; ROE fell 270bp to 24.6%.
  • We make minor adjustments to earnings forecasts with FY24-26F normalised EBITDA increasing by 2-3%. However, normalised NPAT reduces by 1-2% due largely to higher D&A expense.
  • Our target price falls to (login to view) and we maintain our Add rating.

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