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GAR looking sharper as sales rise, but cashflow held-back by working capital & investment
GAR Current 0.30 Target 0.48 +60%
March 13 2022
1 minute read
Sales grew 29%
Last 3 semesters
9% 21% 29%
Costs down profit up
Last 3 semesters
-90% -92% -89%
Cashflow lower
Last 3 semesters million dollars
249, 196, 173
Balance sheet higher leverage
Last 3 semesters million dollars
-4,292 -4,148 -4,217
Capital paid improved
Last 3 semesters million dollars
465, 597, 748
March 13 2022
1 minute read
Sales grew 29%
Last 3 semesters
9% 21% 29%
- Sales grew 29% in the second semester 5,728 million dollars above our 4,766 million dollars forecast.
- This brings the average growth to 25% growth.
- We predict average growth of 5% in this next 12 months to bring sales to 6,315 million dollars in the second semester 2022.
Costs down profit up
Last 3 semesters
-90% -92% -89%
- The cash cost ratio went from -92% to -89% profit from 174 to 353 million dollars in the second semester
- The average cost ratio is at -91% now.
- We use the average -91% cost ratio to predict a 319 million dollars profit in the second semester 2022.
Cashflow lower
Last 3 semesters million dollars
249, 196, 173
- Free cashflow went from 196 to 173 million dollars in the second semester with higher -244 million dollars investment spending.
- Average quarterly Cashflow is at 185 million dollars now.
- We assume lower -129 million dollars investment spending which with higher sales gives a much higher 467 million dollars Cashflow in the second semester 2022.
Balance sheet higher leverage
Last 3 semesters million dollars
-4,292 -4,148 -4,217
- Cash increased 467 to 499 million dollars in the second semester
- Liabilities increased 4,615 to 4,716 million dollars so net cash worsened -4,148 to -4,217 million dollars.
- With our forecast cashflow & a -183 million dollars equity payout -684 million dollars liabilities payment net cash will be -3,495 million dollars in 12 months time.
Capital paid improved
Last 3 semesters million dollars
465, 597, 748
- GAR 14 semester capital paid improved 597 to 748 million dollars in the second semester with -62 million dollars liabilities -67 million dollars equity & will be 6,219 million dollars in12 months time.
- At the current market value of 2,820 million dollars based on our forecasts it’s at 0.30 X assets with a 10 years payback & a 6% yield.
- Our cashflow forecast is 905 million dollars which means an 3 X valuation. A 5 X valuation gives a 60% higher target price of 0.48 Singapore dollars.