FR, shares to go much higher
Target price SGD3.56
Last 12-months cashflow +USD 155 million
March 8th,, 2021
1 minute read
1 minute read
- Sales jumped 18% in the second half to reach USD 328 million, 1% below our forecast.
- This is after a -14% decline in the first half & the average growth is therefore at 2%.
- We expect average growth to rise to 6% in this next 12 months & sales to reach USD 365 million by the second half of 2021.
- Cashflow more than doubled to USD 107 million in the second half from USD 48 million in the first half ok investment gains.
- The average cashflow is now USD 78 million.
- We use investment spending of USD 36 million a semester which with higher sales, gives an average semester free cashflow of USD 67 million in this next 12 months.
Sales rising to new heights, strong cashflow, de leveraging, shares to head much higher...
- The balance sheet leverage of cash minus total liabilities improved to -USD 469 million in the second half from -USD 475 million in the first half & -USD 548 million a year ago.
- With our forecast strong cashflow ahead & a dividend payout of USD 41 million...
- ...net cash will improve further to -USD 375 million in 12 months time.
- Net profit was at USD 62 million in the second half, up 35% from USD 46 million in the first half.
- The cash cost ratio of net profit add back depreciation minus sales as a percent of sales was 70%.
- We use the same 70%cash costs ratio to predict a higher next 12 months net profit of USD 135 million
- FR has paid out capital of USD 410 million in the last five years.
- At the current market value of USD 1.7 billion, it’s 4X capital paid, 2.4X sales, 0.93X assets, 1.38X equity with an 11% profitability & a 2.4% yield.
- Our cashflow forecast is USD 135 million. At 1.6% with a 0.5X adjustment gives a higher target price SGD3.56,