{"id":117,"date":"2013-09-30T14:46:51","date_gmt":"2013-09-30T14:46:51","guid":{"rendered":"http:\/\/bluegemresearch.co.za\/?p=117"},"modified":"2013-09-30T15:27:12","modified_gmt":"2013-09-30T15:27:12","slug":"accentuate-ltd-fy-13-results-tough-h2-prospects-remain-good","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=117","title":{"rendered":"Acc\u00e9ntuate Ltd: FY 13 Results \u2013 Tough H2, Prospects Remain Good"},"content":{"rendered":"<p><em>Initiation of Coverage<em>\u00a0\u2013\u00a0<\/em>Share Code: ACE \u2013 Market Cap: R102m \u2013 PE: 10.9x \u2013 DY: 0.0%<\/em><\/p>\n<p><strong>[wpdm_file id=6]<\/strong><\/p>\n<p><strong>FY 13 Results: Inland Market Tough in H2:13; Acquisitions Made<\/strong><\/p>\n<ul>\n<li>Acc\u00e9ntuate experienced a much tougher H2:13 than we had expected. FY 13 revenue flattened to R284m (FY 12: R283m), c.4% shy of our expected turnover mark.<\/li>\n<li>This soft performance during H2:13 comes from Floorworx where particularly the inland market struggled. Safic and Ion Exchange Safic performed in line with our expectations as the former grows its market exposures and the latter continues to build traction in the local market.<\/li>\n<li>The Group\u2019s FY 13 EPS rose 17% to 8.4cps (FY 12: 7.2cps), but critically the HEPS from Continuing Operations slipped 11% to 8.4cps (FY 12: 9.5cps).<\/li>\n<li>Some of this balance sheet was employed post-results to cleverly acquire two small complementary businesses, both paid out in script and to be incorporated from 1 September 2013 (i.e. ten of the twelve months of FY 14E).<\/li>\n<\/ul>\n<p><strong>Our Thoughts: \u201cWhen\u201d, Not So Much \u201cIf\u201d\u2026<\/strong><\/p>\n<ul>\n<li>Disappointing results and acquisitions aside, Acc\u00e9ntuate still remains well positioned to benefit from the pent-up public sector infrastructure spend. That said, the 2014 elections potentially create downside risk regarding the timing thereof.<\/li>\n<li>In the meantime, management has been driving growth initiatives into other markets and product lines, and seeking strategic acquisitions.<\/li>\n<\/ul>\n<p><strong>Forecast, Valuation and Implied Return: Small Upgrade<\/strong><\/p>\n<ul>\n<li>We raise our fair value for Acc\u00e9ntuate to 122cps (previously: 114cps), which implies a PE of 14.6x. This compares reasonably attractively to two listed comparatives, Distribution and Warehousing Network Ltd (Share code: DAW \u2013 PE of 15.3x) and Afrimat Ltd (Share code: AFT \u2013 PE of 14.8x).<\/li>\n<li>Rolling our fair value forward by the Cost of Equity (CoE), we arrive at a 12m TP of 142cps (previously: 132cps), implying an Exit PE of 13.8x and an attractive implied return of 54%.<\/li>\n<li>The key risks we see in our valuation of Acc\u00e9ntuate remain macro.<\/li>\n<\/ul>\n<p><em>* Note that the Group remains under cautionary announcement pending the release of pro-forma financial results relating to the Suntups acquisition. This results note does not take into account any material information following the resolution of this cautionary announcement.<\/em><\/p>\n<p><strong>[wpdm_file id=6]<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Initiation of Coverage\u00a0\u2013\u00a0Share Code: ACE \u2013 Market Cap: R102m \u2013 PE: 10.9x \u2013 DY: 0.0% [wpdm_file id=6] FY 13 Results: Inland Market Tough in H2:13; Acquisitions Made Acc\u00e9ntuate experienced a much tougher H2:13 than we had expected. FY 13 revenue flattened to R284m (FY 12: R283m), c.4% shy of our expected turnover mark. This soft [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[17,18,42,21,23,22,30],"class_list":["post-117","post","type-post","status-publish","format-standard","hentry","category-accentuate_jse","tag-accentuate","tag-ace","tag-construction","tag-floorworx","tag-ion-exchange","tag-safic","tag-small-caps"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/117","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=117"}],"version-history":[{"count":5,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/117\/revisions"}],"predecessor-version":[{"id":125,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/117\/revisions\/125"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}