{"id":207,"date":"2017-09-05T07:39:42","date_gmt":"2017-09-05T07:39:42","guid":{"rendered":"http:\/\/bluegemresearch.co.za\/?p=207"},"modified":"2017-09-05T09:25:06","modified_gmt":"2017-09-05T09:25:06","slug":"arb-holdings-fy-17-results-resilient-group","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=207","title":{"rendered":"ARB Holdings \u2013 FY 17 Results \u2013 Resilient Group"},"content":{"rendered":"<p><em>Share Code: ARH \u2013 Market Cap: R1.4bn \u2013 PE: 9.5x \u2013 DY: 3.4%<\/em><\/p>\n<p><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2017\/09\/ARB-Holdings_FY-17_Results-Note.pdf\" target=\"_blank\" rel=\"noopener\">Download the full FY 17 results note here<\/a><\/p>\n<p><strong>FY 17 \u2013 Meeting Our Expectations Despite Recession<\/strong><\/p>\n<ul>\n<li>ARB Holdings maintained its revenue during a tough period that included political upheaval in South Africa, SOE paralysis, sour consumer sentiment, a sovereign downgrade and a technical recession (not officially over at the date of publishing).<\/li>\n<li>The Group reported +4% y\/y growth in HEPS to 61.9cps (FY 16: 59.7cps), beating our previous forecast of 61.4cps.<\/li>\n<li>The Group continued to generate strong cash flow with well-managed working capital whilst adding to its store and product footprint.<\/li>\n<li>Management remains committed to the organic and acquisitive growth of existing operations.<\/li>\n<\/ul>\n<p><strong>Our Thoughts: Resilience &amp; Upside<\/strong><\/p>\n<ul>\n<li>Solid results year-after-year continue to build the Group\u2019s track record for resilience while management put in place longer-term initiatives for growth that looks<\/li>\n<li>We do note the various changing dynamics in the cabling supply market as a risk while the currently exercisable put option by Eurolux is actually a good opportunity (in our opinion).<\/li>\n<\/ul>\n<p><strong>Forecast, Valuation &amp; Implied Return: Still Undervalued<\/strong><\/p>\n<ul>\n<li>We raise our estimated fair value for ARH to 687ps (previously: 664cps), which puts the stock on an implied Price Earnings (PE) of 11.1x.<\/li>\n<li>In our opinion, this PE does not appear unreasonable against either ARH\u2019s own history or the various comparatives in the market.<\/li>\n<li>Rolling our fair value forward at our CoE we arrive at a 12m TP of 809cps (previous 12m TP: 779cps).<\/li>\n<li>A 12m TP of 809cps places the share on a comfortable Exit PE of 12.9x.<\/li>\n<li>Our 12m TP implies a return of c.37%.<\/li>\n<\/ul>\n<p><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2017\/09\/ARB-Holdings_FY-17_Results-Note.pdf\" target=\"_blank\" rel=\"noopener\">Download the full FY 17 results note here<\/a><\/p>\n<p><em>See our\u00a0<a title=\"Methodology\" href=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?page_id=9\" target=\"_blank\" rel=\"noopener\">methodology<\/a>\u00a0here and note our disclaimer\u00a0<a title=\"Disclaimer\" href=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?page_id=17\" target=\"_blank\" rel=\"noopener\">here<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: ARH \u2013 Market Cap: R1.4bn \u2013 PE: 9.5x \u2013 DY: 3.4% Download the full FY 17 results note here FY 17 \u2013 Meeting Our Expectations Despite Recession ARB Holdings maintained its revenue during a tough period that included political upheaval in South Africa, SOE paralysis, sour consumer sentiment, a sovereign downgrade and a [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50],"tags":[78,52,51,53,81,75,55,80,15,79,60,77],"class_list":["post-207","post","type-post","status-publish","format-standard","hentry","category-arb-holdings-arh","tag-analyst","tag-arb","tag-arb-holdings","tag-arh","tag-cash-generation","tag-electrical","tag-eurolux","tag-investment","tag-jse","tag-jse-share","tag-research","tag-value"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/207","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=207"}],"version-history":[{"count":2,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/207\/revisions"}],"predecessor-version":[{"id":210,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/207\/revisions\/210"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=207"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=207"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=207"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}