$RUL have just upgraded FY24 guidance,.... for the second time in 6 weeks!
- Revenue to $110-115m, (up from $107-$112m, which was up from $105-$110m)
- Underlying EBITDA to $21.5-23.5m (up from $18.5-$20.5m which was up from $17.5-$19.5m) ....U/L excludes incentives
- PBT to $16.5-$18.0m (up from $13.5-$15.0m, previously $12.5-$14.0m)
The key message is that this is due to a one-off payment of $3.1m, resulting from a change of control at a contract counterparty.
I'm not sure what that means, and while it's not bad news by any means, its not as if it reflects any acceleration in the underlying demand for $RUL products and services. (That is unless the change of control means a contract is being broken and that's the break fee,...but then I'd have thought they might state the negative implication as well. So, I'm wondering what I'm missing here?)
The release makes clear that they had to announce because the event means that current guidance is no longer valid, even though the transaction on its own it not materials. (Is that why, if there is a negative side to it, that element is not being disclosed?)
It will help the y-o-y comparisons look good at the FY results, particularly EPS growth.
From my perspective, today's annoucement doesn't really change anything (apart form the questions it raises for me). $RUL is still well below my valuation, and they are still in the market buying their own shares almost every day (another EPS-driver).
Disc: Held in RL and SM