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26 May 2020: Taylor Collison: Probiotec (PBP): Update - Industry normalizing
TC have an "Outperform" call on PBP, but no price target. They have a DCF valuation of $2.13. PBP closed yesterday at $1.91.
Excerpt:
Our View: We retain our Outperform rating and forecasts. We believe that underlying demand is strong, FY21 will benefit from past acquisitions and cost synergies. The business may also be able to bolt on further accretive acquisitions. Recent contract wins should feed into FY21 results as these contracts ramp up. We have derived a DCF valuation of $2.13.
In late April Probiotec announced that it had been fully operational during the COVID-19 crisis and continues to trade strongly. FY20 guidance was re-iterated with sales expected to be excess of $100m and EBITDA of between $16-$17m. There has been minimal supply chain disruption despite some press suggesting ingredient access problems out of China and India. Probiotec had seen meaningful uplift in orders for coughs, cold/flu, analgesics and immunity products.
Key Points
Recent update and our analysis
Late April update and our analysis
--- click on link above for the full update ---
Disclosure: I don't hold any PBP shares.
FY21 Guidance (see table at footer for comparisons)
Revenue: FY21 guidance, $118-$122m
Underlying EBITDA: $21-$22m
Underlying EPS: 10.0-11.0 cps
About Probiotec
Probiotec Limited is a manufacturer, packer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines, FMCG and consumer health products. The company owns five manufacturing facilities in Australia and distributes its products both domestically and internationally. Products are manufactured by Probiotec on behalf of a range of clients, including major international companies.
Chief Executive Officer of PBP, Mr Wes Stringer comments: “we look forward to welcoming H&H’s employees and customers to the Probiotec Group and continuing to build our manufacturing footprint in Australia via organic growth and further accretive acquisitions".
---ends---
About Probiotec
Probiotec Limited is a manufacturer, packer and distributor of a range of prescription and over-the-counter (OTC) pharmaceuticals, complementary medicines and consumer health products, and fast-moving consumer goods. The company owns five manufacturing facilities in Australia and distributes its products both domestically and internationally. Products are manufactured by Probiotec on behalf of a range of clients, including major international pharmaceutical companies.
Further details about Probiotec are available at www.probiotec.com.
A great set of FY22 results for Probiotic today. It looks like underlying EPS of 16.7 cps was in line with Commsec analyst forecasts of 16.6cps. Great result all the same! Looking forward to revaluing the business shortly.
Source: Commsec 24/08/22
Held: IRL and SM