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LPPF, cashflow positive again
🎯 👗 📈 Rp6,494
Last 12-month cashflow +Rp145bn ⬆️
October 23rd, 2020
⏰ 2 minute read
⏰ 2 minute read
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Sales
Retail sales growth was -44% in the 3Q, much better than the 2Q -82%, but the 7th of 8 negative quarters & still 20% below our forecast. Consignment sales were down by less, -39%. Sales jumped by +47% from the 2Q & we expect the sales recovery to now accelerate with +36.2% growth in this next 12 months to Rp4,988bn.
Cashflow
After the first ever 2 negative quarters, cashflow was back to positive again in the 3Q at +Rp434bn excluding working capital., much better than our forecast. This is because cash receipts were stronger than sales, +64% from 2Q & investment was less than forecast. With our predicted sales recovery, average quarterly cashflow will be Rp165bn in this next 12 months.
Retail sales growth was -44% in the 3Q, much better than the 2Q -82%, but the 7th of 8 negative quarters & still 20% below our forecast. Consignment sales were down by less, -39%. Sales jumped by +47% from the 2Q & we expect the sales recovery to now accelerate with +36.2% growth in this next 12 months to Rp4,988bn.
Cashflow
After the first ever 2 negative quarters, cashflow was back to positive again in the 3Q at +Rp434bn excluding working capital., much better than our forecast. This is because cash receipts were stronger than sales, +64% from 2Q & investment was less than forecast. With our predicted sales recovery, average quarterly cashflow will be Rp165bn in this next 12 months.
Sales rebound, cashflow back to positive, paying out capital again 6X higher target price...
Balance sheet
The balance sheet has switched from net cash to debt partly from the negative cashflow & also because of the accounting changes for leases which we include in debt. From this, net debt was higher at Rp3,666bn in the 3Q. With our forecast positive cashflow & including a Rp112bn equity payout, net debt will reduce to Rp3,118bn in 12 months.
Profit
The net loss was slightly lower in the 3Q than the 2Q at -Rp259bn. The cash cost ratio of net profit add back depreciation minus sales as a% of sales was better at 127% from 141% in the 2Q. We use the normal average 83% as sales recover to predict the next 12 months will be back to profit +Rp562bn.
Value
Despite all the recent negatives, LPPK remains a capital payer. Total capital paid is back up to Rp6,181bn in the 3Q & this will rise further. At Rp2,652bn, it’s 0.53x sales, 0.36x assets, 2.13x equity with a 45.2% profitability & 4.2% yield. Our cashflow forecast is Rp455bn. At 1.6% with a 0.6x adjustment, this gives a higher target price Rp6,494.
The balance sheet has switched from net cash to debt partly from the negative cashflow & also because of the accounting changes for leases which we include in debt. From this, net debt was higher at Rp3,666bn in the 3Q. With our forecast positive cashflow & including a Rp112bn equity payout, net debt will reduce to Rp3,118bn in 12 months.
Profit
The net loss was slightly lower in the 3Q than the 2Q at -Rp259bn. The cash cost ratio of net profit add back depreciation minus sales as a% of sales was better at 127% from 141% in the 2Q. We use the normal average 83% as sales recover to predict the next 12 months will be back to profit +Rp562bn.
Value
Despite all the recent negatives, LPPK remains a capital payer. Total capital paid is back up to Rp6,181bn in the 3Q & this will rise further. At Rp2,652bn, it’s 0.53x sales, 0.36x assets, 2.13x equity with a 45.2% profitability & 4.2% yield. Our cashflow forecast is Rp455bn. At 1.6% with a 0.6x adjustment, this gives a higher target price Rp6,494.
