{"id":311,"date":"2021-08-30T01:01:00","date_gmt":"2021-08-30T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=311"},"modified":"2021-08-29T06:13:29","modified_gmt":"2021-08-29T06:13:29","slug":"arb-holdings-fy-21-shooting-the-lights-out","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=311","title":{"rendered":"ARB Holdings &#8211; FY 21 &#8211; Shooting the Lights Out"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Share Code: ARH \u2013 Market Cap: R1.3bn \u2013 PE: 6.8x \u2013 DY: 4.6%<\/strong><\/p>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/ARB-Holdings_FY-21_Results-Note.pdf\">ARB Holdings &#8211; FY 21 &#8211; Results Note<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/ARB-Holdings_FY-21_Results-Note.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>FY 21 \u2013 Exceptionally strong results<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>ARB Holdings released exceptionally strong FY 21 results with revenue roaring ahead by +24% y\/y (and +8% versus FY 19) to R2.9bn (FY 20: R2.3bn) driven by a recovery in both Electrical and Lighting that is likely to carry into FY 22E (at least).<\/li><li>Added to this top-line expansion, the Group\u2019s cost-savings, efficiency gains &amp; cash preservation all aided HEPS upwards by +38% y\/y (and +41% versus FY 19) to 82.5cps (FY 20: 59.9cps) &amp; making a mockery of our forecast FY 21 HEPS.<\/li><li>The Group resumed its dividend payments and declared a full-year dividend of 42.5cps that includes a 10cps special dividend.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Our Thoughts: CEO continuity in place<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>ARB\u2019s results are even more impressive considering that they were produced during a period that saw a range of hard lockdown levels, multiple waves of COVID, Eskom loadshedding and a domestic recession.<\/li><li>Long-serving CEO, William Neasham, has announced his retirement and lined up Blayne Burke as his successor.<\/li><li>Burke has run the Group\u2019s major Electrical Division for many years and, thus, provides deep institutional knowledge, expertise, and comfortable continuity at the executive level.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Forecast, Valuation &amp; Implied Return: Margin of Safety<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>We see fair value as 654cps (previously: 631cps) on a Price Earnings (PE) of c.7.9x, which is hardly demanding given the quality of the underlying businesses.<\/li><li>Our EV\/EBITDA-implied fair value of 740cps backs up this view, if not hinting at a degree of upside risk to our forecasts.<\/li><li>Using our DCF as a base, our implied 12m TP of 766cps (previous 12m TP: 737cps) places the share on an Exit PE of 8.0x &amp; implies a potential return of c.37%.<\/li><li>Refer to our original <a href=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=146\">Initiation of Coverage<\/a> for more background.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/ARB-Holdings_FY-21_Results-Note.pdf\">ARB Holdings &#8211; FY 21 &#8211; Results Note<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2021\/08\/ARB-Holdings_FY-21_Results-Note.pdf\" class=\"wp-block-file__button\" download>Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: ARH \u2013 Market Cap: R1.3bn \u2013 PE: 6.8x \u2013 DY: 4.6% FY 21 \u2013 Exceptionally strong results ARB Holdings released exceptionally strong FY 21 results with revenue roaring ahead by +24% y\/y (and +8% versus FY 19) to R2.9bn (FY 20: R2.3bn) driven by a recovery in both Electrical and Lighting that is [&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":[52,75,60],"class_list":["post-311","post","type-post","status-publish","format-standard","hentry","category-arb-holdings-arh","tag-arb","tag-electrical","tag-research"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/311","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=311"}],"version-history":[{"count":1,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/311\/revisions"}],"predecessor-version":[{"id":313,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/311\/revisions\/313"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=311"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=311"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=311"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}