Pinned straw:
Infrastructure Services Provider flying under the radar, till now
Highlights
• NPATA of $202.1 million up 12.5% on FY22
• Strong business performance, with growth across all sectors
• Continued positive safety momentum with TRIFR1 down 11%
• Revenue of $5,676.4 million, up 9.8% on FY22
• EBITDA of $465.2 million, up 10.8% with margin of 8.2%
• Work in hand $18.1 billion
• Operating cash flow conversion of 88.8%2
• Final Dividend of 9.41 cents per share, franked to 80%, with total dividend for FY23 of 17.72 cents per share, an increase of 12.5%
• Guidance for FY24 - NPATA growth of 7-10% on FY23 “Ventia’s Statutory NPATA of $202.1m was up 12.5% on the prior corresponding period (pcp), which underpinned our final dividend of 9.41 cents per share and total dividend of 17.72 cents per share (up 13.6% and 12.5% respectively). This result was largely driven by the outperformance in
Consensus below (expected 7-10% NPATA)
I started buying VNT down around $2.50 last year in RL. I think I had it in my SM for a while too.
Their strength is they have decent economies of scale in a price driven industry and it will be hard in a market the size of AU/NZ for a competitor to replicate. Given the debt and the PE overhang the SP was going to have some pressure on it until one of the two resolved. As it turns out, we have likely reached peak interest rates and Apollo and CIMIC have finished selling out. The SP performance over the last few months reflects that.
Happy to keep holding here because I think there is still some room for a business of this scale that can deliver 7%-10% earnings growth. It's also less capital intensive than one might first assume.
This looks like a good businesses @edgescape. I’ve had it on my watchlist for a while. The share price has done really well too. I need to do some more research on it.