Aug 23, 2017 - Result quality. Jun-16A Jun-17A Jun-18F Jun-19F Jun-20F. Other financing cash flows. -1.4. -9.1. 0.0. 0.0
Retail│Australia│Equity research│August 23, 2017
Bapcor Still exceeding targets
ADD (no change) Current price: Target price: Previous target: Up/downside: Reuters: Bloomberg: Market cap:
A$5.54 A$6.19 A$6.22 11.7% BAP.AX BAP AU US$1,221m A$1,544m US$8.02m A$10.43m 40.88m 80.0%
Average daily turnover: Current shares o/s Free float:
Price Close
101.2
5.70
91.4
5.20
81.7
4.70 8
72.0
6
Vol m
4 2 Nov-16
Feb-17
May-17
Source: Bloomberg
Price performance Absolute (%) Relative (%)
1M 5.1 4.8
Josephine LITTLE T (61) 7 3334 4505 E
[email protected] James BARKER T (61) 7 3334 4893 E
[email protected]
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BAP’s FY17 result was above Morgans and consensus estimates at every line with the group ultimately exceeding the top end of its guidance range. Management is comfortable with FY18 consensus estimates, guiding to c30% growth on FY17 proforma NPAT. We comfortably sit 2% above this. BAP often gets criticised for being overly acquisitive, but the proof is in the pudding with all acquisitions exceeding targets to-date and synergies flowing through nicely. BAP will now move into a consolidation phase following this acquisitive period and there is plenty more upside from business optimisation on the agenda. ADD.
FY17 result beats with 36.4% EPS growth BAP’s FY17 result was above our forecast at every line item with the group achieving slightly above the top-end of its guidance range. Highlights of the result include: revenue +47.8%; proforma EBITDA +52.4%; and proforma NPAT +50.9% - buoyed by recent acquisitions (notably Hellaby’s, but also strong growth in each of base businesses). Trade SSS growth remained buoyant at +4.6% (+5%/4.2% 1H/2H) while Retail SSS growth was no worse than feared at +2% (+2.8%/+1.2% 1H/2H). Margin expansion in each business was also a highlight, with synergies and operating leverage the drivers.
FY18 guidance for 30% growth….risk to the upside in our view
Relative to S&P/ASX 200 (RHS)
6.20
Aug-16
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3M 12M -0.4 -12.4 0 -15.7
BAP noted it is comfortable with current consensus forecasts and guided to c30% growth on FY17 proforma NPAT (A$65.8m), which would equate to cA$85.5m FY18 NPAT. We currently forecast A$86.9m FY18 NPAT, equating to 32% growth which we are comfortable with. Accounting for an additional 6 months of HBY Auto and guided ANA/HBY synergies, our FY18 EBITDA forecast only requires c10% growth from the base business which will be readily achievable, in our view. Our EPS forecasts are unchanged in FY18+ (
