People Infrastructure Ltd

PPE Details
 
Posted a Bottom-line Growth of 49% on pcp:People Infrastructure Ltd (ASX: PPE) is associated in Workforce Management and staffing solutions across Australia.
 
H1FY20 Operational Highlights for The Period ended 31^st December 2019:PPE announced its half year results, wherein the company reported normalized revenue of $194.845 million, depicting a growth of 45.4% on the y-o-y basis. Improved revenue was driven by persistent demand from existing clients especially in Health and Community Services, IT and Specialist Services businesses. Normalised EBITDA came in at $13 million, up 54.4% from H1FY19 normalised EBITDA. The business reported positive contribution from the acquisitions, while it continues to roll out process improvements resulting further economies of scale.

During the period, the business generated operating cashflow $2.6 million. The company reported normalised NPATA of $9.038 million, depicting a growth of 49% on the y-o-y basis.
 

Key Financial Highlights for H1FY20 (Source: Company Reports)
 
The company declared an interim dividend amounting to 4 cents per share (fully franked) which is consistent with interim dividend declared for 1H FY 2019.
 
Guidance:For FY20, the business will focus in organic opportunities through investing management and anticipates strong growth over the medium to long term. The company will utilise a separate People Infrastructure budget allocation for new organic opportunities. The company stated that previous acquisitions have been integrated into the broader People Infrastructure business and the performance is in line with guidance.
 
Stock Recommendation:The stock of PPE is quoting at $3.76, with a market capitalisation of $286.35 million. The stock is trading towards the upper band of its 52-week trading range of $2.120 and $4.080. The stock has generated returns of 23.81% and 20.37% in the last three months and six months, respectively. The company showed a decent performance throughout the first half of the year. The company continues to deliver on the long-term strategy of being a leading provider when it comes to workforce solutions. The stock is available at a price to earnings multiple of 26.230x on Trailing Twelve Months (TTM) basis, as compared to the industry average (Industrials) of 44x. Considering the business prospects and valuation, we recommend a“Hold” rating on the stock at the current market price of $3.760 per share, down 3.59% as on 14^th February 2020.

 
PPE Daily Technical Chart (Source: Thomson Reuters)
 

SDI Limited

SDI Details
 
Sales Rose 7.7% YoY: SDI Limited is engaged in the manufacturing and distribution of amalgam and composite restorative materials, other dental materials, and product research and development.
 
H1FY20 Business Highlights for The Period Ended 31 December 2019: SDI announced its half-yearly, wherein the company reported sales of $40 million, up 7.7% on y-o-y basis. The above growth was driven by strong growth in whitening sales and continued strong growth across aesthetics sales, including Glass Ionomersand composites, offset by the ongoing decline in amalgam sales.  The company reported EBITDA of $7.1 million, up 11.4% on y-o-y basis. NPAT stood at $3.5 million, witnessed a growth of 11.9% from H1FY19. North American sales went through several challenges as amalgam products represented a significant portion of the sales, followed by a disappointing saleswithin whitening products.
 

Key Financial Highlights for H1FY20 (Source: Company Reports)
 
Dividend Announcement: The Board of Directors came forward and declared interim franked ordinary dividend amounting to 1.35 cents per share that is 0.15 cents higher as compared to the previous interim dividend.  
 
Outlook:The company expects FY20 is likely to deliver similar trends like past years, highlighting strong growth in both the aesthetic and whitening products and the continued decline in amalgam products. The company expects growth in the equipment sales with the roll out to all markets of the new curing light.
 
Stock Recommendation:The stock of SDI is trading at $0.950, with a market capitalisation of $104.01 million. The stock is quoting at the upper band of its 52-week trading range of $0.687 and $0.990. The stock has generated returns of 15.89% and 16.59% in the last six months and one year, respectively.  Going forward, the company expects whitening sales across North America is likely to improve during the second half of FY20 with the release of new premium packaging, and the start of a new marketing campaign for the CY20. The stock is available at a price to book multiple of 1.4x on TTM basis, as compared to the industry average (Healthcare) of 4.3x. Considering the above factors and business prospects, we give a “Hold” rating on the stock at the current market price of $0.950 per share, up 8.571% as on 14^th February 2020, taking cues from the release related to H1FY20 results.
 
 
SDI Daily Technical Chart (Source: Thomson Reuters)

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