Consensus community valuation
$6.31
Average Intrinsic Value
7.9%
Undervalued by
Active Member Straws
#HY20 Results
Added 4 months ago

Bapcor just keeps getting it done. 

For the half it saw revenue rise 10.4%, while NPAT increased 5.9% (pro forma). The dividend was lifted by 6.7%

All segments made good headway -- even retail moved forward (3.1% increase in EBITDA). The continued expansion of their network looks to be proceeding well, with Thai stores mostly EBITDA positive in December. Gross margins improved slightly too.

The business has $43m in cash, but the debt to equity has increased to 59% (due to acquisitions).

Not a business that is likely to see fast growth, but I expect it to steadily grow at a decent rate in the years ahead. Have slightly increased my valuation.

Results presentation is here

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#COVID-19 Update
Added 2 months ago

Bapcor has provided a business update for the period since H1 results were released on January 20.

In that period, Bapcor said its core trade segment have continued to be strong with same store sales up 5% and gross margin improvement. Likewise, the retail segment has experienced "good sales growth", with trends from the first half continuing for other segments. On this basis, the company is on track to meet its full year guidance.

That being said, with store closures and lockdowns the company said it's not possible to forecast how the business will perform for the remainder of the year, and so the company has removed any FY guidance.

Shares have so far fallen ~50% since the current crisis began. At the half year, the business had ~$43m in cash and $441m in long term debt (comprised of multiple tranches that don't begin to expire until 2022)

I expect the trade segment will hold up relatively well, but that retail will suffer a lot more. Although worth noting that Retail represents just 16% of total group EBITDA.

I estimate that FY20 EPS will be roughly 30cps, which puts BAP on a forward PE of ~11

ASX announcement here

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#ASX Announcements
Added 4 months ago

12 February 2020

RECORD REVENUE & EARNINGS

Revenue of $702.5M, up 10.4%

Pro-forma EBITDA (excluding AASB 16)of $79.4M, up 4.6%

Pro-forma Net Profit after Tax(excluding AASB 16) of $45.3M,up 5.1%

Pro-forma Earnings Per Share(excluding AASB 16) of 15.94 cents per share,up 4.0%

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#Capital raise
Last edited a month ago

Bapcor has raised $180m through an institutional placement, issuing 40.9m new shares at $4.40.

This was done at a 8.5% discount to the most recent closing price, which isn't too bad (although it represents a ~32% discount to the pre-COVID market price).

The company is also hoping to raise a further $30m through a Share Purchase Plan (SPP) to eligible shareholders, at the same offer price (or better if the market price falls between now and the SPP close date). That will result in the issue of a further ~6.8m shares.

In total, BAP will have approximately 332m shares on issue.

The raise is primarily to reduce the comapny's net debt, and ensure there is sufficient liquidity available thorugh the COVD-19 disruption. After the raise, Bapcor expects to have at least $231m in cash, or $261m if the SPP is fully subscribed. That comapres to total borrowings of $441m.

Put another way, the net debt to EBITDA ratio wiull drop to 1.3x

At the same time, Bapcir provided a trading update which shows that business has held up remarkeably well through to the end of March, although the NZ business suffered more than others due to stricter lockdown measures. Safe to assume that April will see the full impacts of lockdowns, and it wont be pretty.

Nevertheless, the business is now well positioned to weather the storm and there is no change to its 5 year strategy.

I will lower my valuation due to the increased number of shares on issue.

ASX announcement here

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#FY2019 Results
Last edited 3 months ago
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#Broker / Analyst Views
Last edited 6 months ago

31 May-2019:  Credit Suisse rates BAP as "Initiation of coverage with Outperform"

Credit Suisse initiates coverage on Bapcor with an Outperform rating and $6.95 target. The company has achieved private-label penetration of 24% across Australia's trade and retail markets.

 

The broker considers the successful execution of the company's strategy and the roll-out of around 50 stores implies at least 16% of embedded growth over and above FY19 estimates.

 

The broker believes the de-rating of the stock has been driven by concerns around near-term momentum. Hence, a valuation gap has emerged.

 

Target price is $6.95 Current Price is $5.96 Difference: $0.99
If BAP meets the Credit Suisse target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $6.98, suggesting upside of 17.1% (ex-dividends)

The company's fiscal year ends in June.

 

Forecast for FY19:

Credit Suisse forecasts a full year FY19 dividend of 17.17 cents and EPS of 33.36 cents.
At the last closing share price the estimated dividend yield is 2.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.6, implying annual growth of -0.9%.

Current consensus DPS estimate is 17.8, implying a prospective dividend yield of 3.0%.

Current consensus EPS estimate suggests the PER is 17.7.

Forecast for FY20:

Credit Suisse forecasts a full year FY20 dividend of 18.37 cents and EPS of 36.36 cents.
At the last closing share price the estimated dividend yield is 3.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.3, implying annual growth of 11.0%.

Current consensus DPS estimate is 19.7, implying a prospective dividend yield of 3.3%.

Current consensus EPS estimate suggests the PER is 16.0.

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