Reporting Season

Johns Lyng share price sinks after posting record year earnings

By Market Index
Mon 29 Aug 22, 1:29pm (AEDT)
Source: Unsplash

Key Points

  • Johns Lyng posted full year FY22 net profit after tax (NPAT) of $38.5m, up 40.1%
  • Management guided to FY23 sales revenue of $1,030.9m, up 15% year-on-year, and FY23 earnings of $105.3m, up 26%
  • Fully-franked full-year dividends of 5.7 cents was up 14% on last year

Johns Lyng Group (ASX: JLG) was down -6% at noon despite the property services group posting a full year FY22 net profit after tax (NPAT) of $38.5m, up 40.1% on revenue of $895m, which was 57.5% improvement on the previous period.

Earnings (EBITDA) were up 58.9% to $83.6m, while earnings per share (EPS) were also up 24.5% to 10.34 cents.

What should have also made shareholders smile this morning was management’s decision to declare a 3-cent final dividend, bringing fully-franked full-year dividends to 5.7 cents – up 14% on last year.

Management guided to FY23 sales revenue of $1,030.9m, up 15% year-on-year, and FY23 earnings (EBITDA) of $105.3m, up 26%.


The June 2021 Victorian storms and February 2022 flooding in NSW and QLD underpinned strong performance in the core Insurance Building and Restoration Services (IB&RS) division, which delivered revenue of $586.5m, up 63.8% on the previous year.

Meantime, catastrophe response activity revenue was up 90.4% to $164.8m.

Other noteworthy highlights during what was a huge year for the group was a $230m equity capital raise, which helped to fund numerous acquisitions, including the US$144m acquisition of US insurance repairs provider Reconstruction Holdings.

During FY22, Johns Lyng achieved several new contract wins and extensions, and also opened new offices in Launceston, Echuca, Coffs Harbour, Wollongong and Bairnsdale, helping to facilitate increased work allocation from insurance panels.

Solid pipeline

Johns Lyng CEO Scott Didier reminded investors that the IB&RS division is looking at a “solid pipeline of work” heading into the next financial year.

Didier also notes the company has additional acquisitions on radar and strategic growth opportunities across all its segments.

The company also plans to progress its Strata Services growth strategy following the acquisitions of several businesses in FY22, including Unitech and a controlling interest in restoration services company Steamatic Australia.

Johns Lyng Group share price over 12 months.


What brokers think

While today’s favourable result appears to have been dragged down along with the broader market sell off, this may only make for a more attractive entry ahead of potential broker re-ratings later this week.


The group’s share price is up 28% over one year, but has fallen -18% since the start of 2022.


Consensus on the group is Strong Buy.


Based on Morningstar’s fair value of $9.07 the stock appears to be undervalued.


Ord Minnett, which initiated coverage with an Accumulate rating and $8.40 target price late July, expects the group to expand into the US and strata in Australia.

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