Research notes

SK1 delivered a strong maiden result, ~5% beat to prospectus NPAT forecasts. Pro forma NPAT of $9.0m was up 41% yoy. Sales growth was up 29% driven by 9.6% LFL, 22 new store openings, stable gross margins and delivered operating leverage even with cost investment. EBIT margins expanded 120bps (15.3%). Key growth priorities remain on track: 1) store rollout in FY27 expected to be 18-20 stores with a target of 180-210, 2) improving store economics and 3) international expansion well progressed with first opening expected in 2H FY27. We have increased our NPAT forecasts by ~5% in FY27/28 respectively. Our valuation increases to $3.10 (from $2.90), driven by earnings revisions. We retain our BUY recommendation; we are forecasting ~30% NPAT growth p.a. over the next few years, which we think more than justifies the >22x PE multiple.

A predictable result, largely in-line with expectations. No change to short-term guidance. Immaterial forecast changes, target price set at $5.43/sh. While we appreciate DBI’s quality, yield and growth drivers, at current share prices the potential TSR is sufficiently compressed at c.7% to retain a HOLD. Management’s acknowledgement of its interest in the Port of Newcastle sale unsettles the thus-far dormant risk of M&A value destruction.

ACE delivered a solid FY26 result, a small beat vs MorgansF/consensus, with Revenue of $86.2m (+45% yoy) modestly ahead of MorgansF of $85.5m and Underlying EBITDA (pre-SBP) of $8.5m (up +49% yoy) above ACE’s FY26 EBITDA guidance range of $7.2-8.2m, representing a ~6% beat vs. MorgansF $8.0m. FY27 guidance for revenue growth of 16-23% is largely underpinned by ~$97m of already contracted revenue. ACE remains well progressed across a number of tenders, representing potential catalysts into FY27. Given ACE’s guidance, our EBITDA forecasts remain unchanged, with conversion of further opportunities being incremental. We retain our Speculative Buy rating on ACE with a blended price target of $2.00/sh.

SDR’s FY26 result was slightly below at the topline (A$266m, +22% c/c vs the pcp) and ~6% under at underlying EBITDA (~A$28m, +96% on pcp). Key business metrics however remain robust (LTV/CAC of 6.6x, ARR +24% c/c and Rule of 40 of 25.9%). Of note was SDR's first multi-year framework, guiding to a mid-20s adjusted EBITDA margin by FY30 (10.6% in FY26) on ARR compounding at a CAGR in the 20s. We lower our FY27/FY28 EBITDA ~7%/~5% and our price target to A$5.45 (from A$5.90). We retain our BUY recommendation.

SYL continues to pursue projects across its target structural growth themes of: a) Brisbane 2032, b) east-coast renewable energy zones, c) data centres, and d) the national defence pipeline, expanding its geographic footprint since IPO to reflect this. Incremental strategic acquisitions combined with double-digit organic earnings growth in FY27 see the stock trading on a PEG of <1x. We continue to support the SYL strategy (geographic and sector diversification), seeing the potential given the undemanding valuation, relative to the mid-teens EPS growth outlook. Buy retained, with a $3.60/sh price target.

ACF’s FY26 result was largely in line with expectations with underlying EBITDA consistent with revised guidance provided in June. FY27 guidance was upgraded following a solid start to the year, the strength of the forward order book, and the expected contributions from the two recent acquisitions of AGIS and Preston Superdeck. The performance of Industrial Access was the key highlight with revenue jumping 53%, driven by both acquisitions and organic growth. While Construction revenue increased only 1%, a recovery in the QLD formwork market delivered an improved performance in 2H26 with momentum continuing into FY27. For FY27, ACF has upgraded revenue guidance by 1% at the midpoint, while underlying EBITDA guidance was lifted by 3%. We increase FY27-29F underlying EBITDA by 2%. Our target price rises to $1.40 (from $1.30) and we maintain our BUY rating. Trading on 8.6x FY27F PE with a 3.8% yield, we believe the valuation remains attractive.

TYR’s FY26 result missed consensus by 3% at the PBT line (A$24.7m vs A$25.5m) and by a steeper 13% at NPAT (A$21.3m), with the wider gap reflecting a higher tax expense as TYR's carried forward tax losses wind down. We would describe the result as broadly solid: FY26 guidance was met on gross profit (A$231.8m vs A$230m–A$240m) and EBITDA margin (28.9% vs 28.5%–30.0%), albeit at the low end of both ranges. The key positive was continued margin expansion and improving cash flow. The main offsetting concern is decelerating revenue growth (0.7%), though management's focus remains on gross profit growth, which was more reasonable at +5% in FY26. We lower TYR FY26F/FY27F NPBT by ~1% on slightly more conservative top-line growth assumptions. Our PT is reduced to A$1.31 (previously A$1.48) on more conservative long-term growth assumptions in our DCF. With >20% upside to our PT, we maintain our BUY call.

ARB’s FY26 result was better than feared, with NPAT +5% ahead of consensus and strengthening 2H margins solidifying confidence in a return to growth in FY27. 2H Aftermarket sales were weak (-8%; MorgansF -7.5%; consensus -2%) but expectedly resilient against a weaker NVS sales backdrop (ARB Index -14%). Gross margins (2H +420bps yoy), US growth (+13.5% USD; accelerating store-in-store rollout), OEM contract wins (x2), resilient order books (strong 2H), meaningful Toyota FY27 tailwinds and a net cash balance sheet (~A$48m) were key highlights. We are encouraged by an exceptionally resilient result, with ARB showing its quality, emerging from cyclical lows with meaningful FY27 tailwinds.

COL’s FY26 result was broadly in line with expectations, with Supermarkets the key highlight while Liquor remained soft. Despite a challenging operating environment due to ongoing cost-of-living pressures, geopolitical uncertainty and increasing regulatory complexity, COL continued to gain market share in Supermarkets with momentum building across its digital business. COL also outlined several initiatives to support its next phase of growth. Alongside the ongoing development of its VIC automated distribution centre, the company plans to accelerate investment in stores, online capacity and technology, while repositioning its liquor offering with a greater focus on supermarket co-locations and a more integrated food and drinks proposition. We adjust FY27/28/29F underlying EBIT by +1%/+2%/+2%. Our target price increases to $25.40 (from $24.60) and we maintain our ACCUMULATE rating.

THL's FY26 result was in line with its recently upgraded guidance. Underlying EBIT increased 17% and NPAT was up 34% on the pcp. THL reported a strong Rentals result, however vehicles sales and margins declined. We view the result as a strong outcome considering operating conditions were challenging. THL's FY27 outlook is mixed, however profit growth is targeted. Rental bookings are now recovering, but the earnings step-up flagged for FY27 has been pushed out. We have upgraded our forecasts. THL's result and outlook are somewhat overshadowed by corporate activity with two proposed offers and due diligence well underway. In our view, the current offers are too low and need to be lifted given THL’s earnings recovery and stronger balance sheet. We maintain a BUY rating with A$3.00 price target.