Johns Lyng grows its profit by 84% and upgrades guidance due to increased restorative work, leaving shareholders very pleased

Nick Sundich Nick Sundich, February 21, 2023

Johns Lyng Group (ASX:JLG) delivered the best 1HY23 result of the companies reporting this morning. The company has been one of the few beneficiaries of catastrophic weather events that have occurred in recent months.

 

 

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Johns Lyng Group grows its profit by 84%

Johns Lyng Group recorded $635.6m in revenue, up 71% from 1HY22.

Revenue from the company’s Insurance Building and Restoration Services (IBRS) division increased by 62% to $374.8m, but revenue from Catastrophe work rose 179% to $186.1m. The latter was due to increased catastrophic weather events, particularly Hurricane Ian in the US.

The company’s Net Profit After Tax came in at $34.1m, up 84%, and its EPS was 9.68c, up 88%. There was also strong EBITDA growth, with the $59.4m result being 63% higher than 12 months.

Nonetheless, Johns Lyng Group only paid a dividend of 4.5c per share, which was only 47% of NPAT and a yield of only 1.4% on an annualised basis.

The company’s shares are up 12% today and up over 360% in the last five years.

 

Johns Lyng Group (ASX:JLG) share price chart, log scale (Source: TradingView)

 

Upgraded guidance

This result caused the company to update its guidance for FY23.

It is now expecting $1.15bn in revenue, up 15% from FY22 and an 11.2% upgrade from the original guidance, along with $111.1m in EBITDA, which would represent a 13% increase from FY22 and is a 5.5% upgrade from previous guidance.

Investors might argue that this result was a one-off but the company disagrees. CEO Scott Didier claimed that the value and duration of catastrophic events has been increasing – in other words, revenues from disasters flow over multiple periods.

 

 

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