Acrow Formwork and Construction Services’ full year revenue and underlying earnings were both largely in line with Morgans’ expectations, but the broker notes a higher tax rate drove a miss on underlying net profit.
The broker highlighted strong revenue growth of 19% and 114% in Formwork and Industrial Services respectively, while Commercial Scaffold revenue was down -10%.
The company is guiding to underlying earnings growth of more than 20% and net profit growth of more than 40% in FY22. Morgans increases earnings per share forecasts by 3%, 5% and 19% through to FY24.
The Add rating is retained and the target price increases to $0.56 from $0.55.
Sector: Capital Goods.
Target price is $0.56.Current Price is $0.45. Difference: $0.11 – (brackets indicate current price is over target). If ACF meets the Morgans target it will return approximately 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).
