{"id":435,"date":"2023-03-17T01:01:00","date_gmt":"2023-03-17T01:01:00","guid":{"rendered":"https:\/\/bluegemresearch.co.za\/?p=435"},"modified":"2023-03-16T12:15:51","modified_gmt":"2023-03-16T12:15:51","slug":"metrofile-holdings-h123-results-great-top-line-growth","status":"publish","type":"post","link":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/?p=435","title":{"rendered":"Metrofile Holdings &#8211; H1:23 Results &#8211; Great Top-line Growth"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>Share Code: MFL \u2013 Market Cap: R1.3bn \u2013 PE: 10.0x \u2013 DY: 5.8%<\/em><\/p>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-bd020038-2ee8-4d90-b5ce-7867bce2f8be\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Holdings_H1_23_Results-Note.pdf\"><strong>Metrofile Holdings &#8211; H1:23 Results Note<\/strong><\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Holdings_H1_23_Results-Note.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-bd020038-2ee8-4d90-b5ce-7867bce2f8be\">Download<\/a><\/div>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>H1:23 Results: Revenue &amp; Digital Growth Occurring<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Revenue rose +19% y\/y to R564m (H1:22 \u2013 R474m), driven by a +61% y\/y growth in digital services but revenue mix and costs moved against the Group&#8217;s margins and saw EBITDA only rise +6% y\/y &amp; HEPS lift +1% y\/y to 15.0cps (H1:22 &#8211; 14.9cps).<\/li>\n\n\n\n<li>Management returned R22.6m to shareholders through share buy-backs (c.6cps) and have declared a dividend of 9cps (H1:23 &#8211; 9cps).<\/li>\n\n\n\n<li>We have somewhat lifted our forecast revenue expectations but also tried to factor more sustained inflationary pressures and higher interest rates into the Group\u2019s forecast period.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Our Thoughts: Bottom-line Growth Coming\u2026<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>While the current period was somewhat disappointing from a margin perspective (we did guide for margin pressure in H1:23 in our previous note), we do expect revenue growth to start to drop to the bottom-line in H2:23E.<\/li>\n\n\n\n<li>The new go-to-market sales team in MRM South Africa, IronTree\u2019s continuing (if not accelerating) growth, Metrofile VYSION\u2019s success in the enterprise space, &amp; a growing MRM Middle East (mostly digital services) are all likely to grow in contribution to the Group over time and, thus, the Group\u2019s growth profile should start to move towards these businesses with their digital tailwinds.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Revenue-Mix.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Revenue-Mix.png\" alt=\"\" class=\"wp-image-436\" width=\"474\" height=\"248\" srcset=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Revenue-Mix.png 487w, https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Revenue-Mix-300x157.png 300w\" sizes=\"auto, (max-width: 474px) 100vw, 474px\" \/><\/a><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Forecast, Valuation and Implied Return: Relatively Cheap<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>We see Metrofile\u2019s fair value as 426cps (previously: 404cps), or c.37% higher than its current share price.<\/li>\n\n\n\n<li>Importantly, our fair value implies an EV\/EBITDA of 7.6x &amp; a PE of 13.8x, which compares attractively to Iron Mountain\u2019s current EV\/EBITDA of 14.5x &amp; PE of 27.4x.<\/li>\n\n\n\n<li>Rolling our fair value forward, we arrive at a 12m TP of 496cps (previously: 473cps), implying an attractive c.60% return (including dividends) from these levels.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Relative-Valuation.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" src=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Relative-Valuation.png\" alt=\"\" class=\"wp-image-437\" width=\"501\" height=\"253\" srcset=\"https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Relative-Valuation.png 568w, https:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Relative-Valuation-300x152.png 300w\" sizes=\"auto, (max-width: 501px) 100vw, 501px\" \/><\/a><\/figure>\n\n\n\n<div class=\"wp-block-file\"><a id=\"wp-block-file--media-bd020038-2ee8-4d90-b5ce-7867bce2f8be\" href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Holdings_H1_23_Results-Note.pdf\"><strong>Metrofile Holdings &#8211; H1:23 Results Note<\/strong><\/a><a href=\"http:\/\/v5j22kvl0zh.c.updraftclone.com\/wp-content\/uploads\/2023\/03\/Metrofile-Holdings_H1_23_Results-Note.pdf\" class=\"wp-block-file__button wp-element-button\" download aria-describedby=\"wp-block-file--media-bd020038-2ee8-4d90-b5ce-7867bce2f8be\">Download<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Share Code: MFL \u2013 Market Cap: R1.3bn \u2013 PE: 10.0x \u2013 DY: 5.8% H1:23 Results: Revenue &amp; Digital Growth Occurring Our Thoughts: Bottom-line Growth Coming\u2026 Forecast, Valuation and Implied Return: Relatively Cheap<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[132],"tags":[],"class_list":["post-435","post","type-post","status-publish","format-standard","hentry","category-metrofile-holdings-mfl"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/435","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=435"}],"version-history":[{"count":2,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/435\/revisions"}],"predecessor-version":[{"id":440,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=\/wp\/v2\/posts\/435\/revisions\/440"}],"wp:attachment":[{"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=435"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=435"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/v5j22kvl0zh.c.updraftclone.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=435"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}