{"id":370,"date":"2022-04-11T01:01:00","date_gmt":"2022-04-11T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=370"},"modified":"2022-04-09T09:51:49","modified_gmt":"2022-04-09T09:51:49","slug":"trellidor-door-holdings-h122-series-of-unfortunate-events","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=370","title":{"rendered":"Trellidor Door Holdings &#8211; H1:22 &#8211; Series of Unfortunate Events"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: TRL &#8211; Market Cap.: R267m &#8211; PE: 7.9x &#8211; DY: 3.9%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-8611d838-46ba-491b-9784-f7f74fbe2652\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/04\/Trellidor-Holdings_Results-Note_H1_22.pdf\">Trellidor Holdings &#8211; H1:22 &#8211; Results Note<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/04\/Trellidor-Holdings_Results-Note_H1_22.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-8611d838-46ba-491b-9784-f7f74fbe2652\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>H1:22 Results: Riots, Strike, Shortages &amp; Curveballs\u2026<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The riots in July &amp; the metalworkers strike (c.12% lost production time in Trellidor) combined with stock shortages in the Taylor to hurt sales &amp; pressure margins.<\/li><li>Despite losing an estimated c.R25m of turnover &amp; c.R12m of EBITDA to these unfortunate events, Group revenue managed to be maintained at R284m (H1:21 \u2013 R282m).<\/li><li>Gross margin contracted to 40.1% (H1:21 \u2013 44.6%), EBITDA fell to R46.5m (H1:21 \u2013 R57.8m) &amp; HEPS contracted to 25.4cps (H1:21 \u2013 30.6cps).<\/li><li>As a final curveball, a contingent liability has manifested in the form of an adverse labour judgement being upheld. We have assumed an R29m one-off expense in H2:22 due to this &amp; management have skipped their dividend in anticipation of having to fund this drawdown.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Our Thoughts: Better H2:22 Likely<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>We expect that in H2:22E, the acquisitions in Trellidor Retail, the full-period consolidation of the UK, the maintenance of full production in the factories and more aggressive price increases are all likely to see some of the H1:22 underperformance clawed back.<\/li><li>Despite this, recent raw material price spikes (from Russia-Ukraine) &amp; supply chain disruptions (from China\u2019s latest COVID outbreak meeting its zero COVID policy) put this view at risk.<\/li><\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Forecast, Valuation &amp; Implied Return: Worth &gt; 400cps<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Our DCF Models imply that Trellidor is worth c.469cps (previously: 548cps) on a PE of 13.2x &amp; EV\/EBITDA of 7.3x.<\/li><li>Our Relative Valuation implies a fair value of 411cps (previously 470cps), which does not agree with the above DCF. Despite this, <em>both<\/em> models indicate a fair value for Trellidor <em>at least<\/em> greater than 400cps (well above the current 285cps share price).<\/li><li>Rolling this DCF SOTP fair value forward we arrive at a 12m TP of 580cps (previously 656cps) implying a total return of c.103%.<\/li><\/ul>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-bb230e27-a7a4-422e-b6c0-e0228ebcfb22\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/04\/Trellidor-Holdings_Results-Note_H1_22.pdf\">Trellidor Holdings &#8211; H1:22 &#8211; Results Note<\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2022\/04\/Trellidor-Holdings_Results-Note_H1_22.pdf\" class=\"wp-block-file__button\" download aria-describedby=\"wp-block-file--media-bb230e27-a7a4-422e-b6c0-e0228ebcfb22\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: TRL &#8211; Market Cap.: R267m &#8211; PE: 7.9x &#8211; DY: 3.9% H1:22 Results: Riots, Strike, Shortages &amp; Curveballs\u2026 The riots in July &amp; the metalworkers strike (c.12% lost production time in Trellidor) combined with stock shortages in the Taylor to hurt sales &amp; pressure margins. Despite losing an estimated c.R25m of turnover &amp; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[111],"tags":[13,60,20,30,16,112,143],"class_list":["post-370","post","type-post","status-publish","format-standard","hentry","category-trellidor-trl","tag-equity-research","tag-research","tag-small-cap","tag-small-caps","tag-south-africa","tag-trellidor","tag-trl"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/370","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=370"}],"version-history":[{"count":1,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/370\/revisions"}],"predecessor-version":[{"id":372,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/370\/revisions\/372"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}