Image source: @Michael Gaida/Pixabay

Highlights

  • Johns Lyng is an ASX-listed building and restoration services firm
  • In FY23, the company registered 43.2% YoY rise in revenue to AUD 1.281 billion
  • The company expects 18.5% growth in BaU revenue and 20.1% growth in BaU EBITDA

Johns Lyng Group Limited (ASX: JLG) is an integrated building services provider. The Australia based firm offers building restoration, strata and energy services across the globe. Established in 1953, the company now manages 24 brands and 130 operating subsidiaries.

The global construction firm witnessed a 43.2% YoY rise in revenue to AUD 1.281 billion in the financial year 2023 (FY23), 42.9% YoY increase in EBITDA to AU$119.4 million, 64.3% YoY surge in NPAT to AU$62.8 million.

Growth prospects

Data by the Australian Bureau of Statistics (ABS) showed a considerable growth of 7.5% in dwelling approvals to 14,223 units in October 2023. This follows a decline of 4.0% in September 2023. Private sector houses recorded a rise of 2.2%, while private sector dwelling excluding houses surged by 19.5%. During the reported period, new residential building value grew by 8.9% to AUD 6.36 billion and non-residential buildings recorded a growth of 6.2% to AUD 5.91 billion.

In the June 2023 quarter, gross value added in the construction sector surged by 2.2%, making it the largest contributor to GVA growth. In 2QFY23, hiring of machinery for construction projects also drove GVA growth.

In the September 2023 quarter, the capital expenditure in the structures and buildings sector grew by 13.7% annually and total capital expenditure jumped 10.7% YoY. These data bode well for companies in the construction sector.

Key challenges

Although total dwellings approved increased in October 2023,  it has been low this financial year as between July-October 2023, 55,029 units were approved compared to 65,599 in PcP.

Total dwelling approvals in October 2023 fell in areas like Tasmania (-14.4%), south Australia (-7.2%) and Victoria (-1.4%).

Moreover, the value of residential buildings approved dropped by 0.2%, comprising a fall of 0.2% in new residential buildings and a fall of 0.1% in alterations and additions.

Recent business update

Recently, the company announced the acquisition of Smoke Alarms Australia (SAA) and Link Fire Holdings which is expected to assist 5th Essential Services strategic growth pillar of JLG. In FY23, JLG USA launched makesafe and express builder service line.

Outlook

The company expects strong momentum from FY23 to continue to drive performance of FY24. 

In FY24, the company expects to register group revenue of AUD 1.176 billion and EBITDA of AUD 128 million. During the reported period, 18.5% growth is expected in BaU (Business as Usual) revenue and 20.1% growth in BaU EBITDA.

Share performance of JLG

JLG shares closed 2.79% up at AUD 5.9 apiece on 4 December 2023. Including today’s gain, the stock price has decreased by 19.73% in the last one year and has dropped by 9.65% in the last six months. The 52-week high of JLG is AUD 7.43, recorded on 2 December 2022 and the 52-week low is AUD 4.94, recorded on 23 June 2023.

 

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

 

Note 2: The reference date for all price data, currency, is 4 December 2023. The reference data in this report has been partly sourced from REFINITIV.