Key message: FY22 will be a normal year and should reflect the real operational performance. While cement volumes will probably stabilise at 2H FY21 levels, average prices (up 3-4%) and volumes (up 10-12%) in FY22 should drive good earnings growth.
Key message: A strong order book platform has been set and execution will now follow. The ERI division looks set to grow strongly, with management medium-term targets well ahead of current levels (and our forecasts). Good execution on the growing order book may well vindicate management’s outlook.
Key message: Strong demand is evident in all markets, but raw material cost pressure will impact 1H margins. We expect some input cost recovery in 2H.
Key message: An earnings enhancing transaction through Kian Ann increases exposure to two subsidiaries KKB and MIH. Net proceeds from the transaction should reduce debt levels further.
Key message: Weaker than our expectations – margins have dropped in 2H to approx. 4.9% from 6.1% in 1H. The Trading Update does not give enough detail to reconcile the difference, although the tone is overall positive.
Key message: We adjust our FY21 forecasts in line with the trading update but continue to believe that Motus will be trading off a high base into FY22 and may struggle to replicate earnings due to the lower availability of used cars coming off internal rental fleets. Release of provisions may also have boosted FY21 results.
Key message: FY21 will be a messy result, but underlying cement operations are experiencing strong demand with price increases holding. Expect margin guidance of +20% in the SA cement business.
https://chronux.co.za/wp-content/uploads/2021/06/AFT-0621-FY21-Results.pdf
Key message: Comparative months are now Covid-impacted, and YoY comparisons are not consistent. We will start to compare current months with the comparative from two years ago to get a real sense of the state of new car sales.
Key message: Poor balance sheet management has long bedevilled returns. However, the focus on improving returns is now evident in the working capital management. Through fixing (Equipment) and disposals (Automotive), Barloworld looks poised to achieve target returns.