When forecasting results and trading statements, you can expect to be wrong. The question is, how wrong? If you are reasonably close and all the key drivers and metrics that you expect are there, then I call that a win. That said, even the best analyst won’t get their forecasts right all the time.
That disclaimer noted, here are some positive news flow items, trading statements and results that I am expecting out on SENS soon:
Rolfes Technology Holdings (RLF) has a June year-end. The Group reported HEPS growth of +34% in its H1:17 results. I am expecting FY 17 HEPS of 71.6cps or +35% y/y, which implies that Rolfes should be putting out a trading statement soon. There was a change in FD, though, so this may slow the reporting cycle down a bit.
ADvTech (ADH) is also a high growth stock that reported Normalized EPS +24% y/y for its FY 16 (ending 31 December 2016). Enrolments were positive for the period, implying a great FY 17E coming up. I am expecting FY 17 (till 31 December 2017) to show HEPS of 92.8cps or +29% y/y, but we will get a good indication of my accuracy here when ADvTech reports their H1:17 results soon. Look for excellent cash conversion here and, particularly in Tertiary, a steady growth in the number of enrolled students.
[Post Note: Shortly after writing this, ADvTech did indeed put out its H1:17 trading update. Normalized EPS is expected to be +20% to +25%, so my view appears to be more or less in line with what is happening out there.]
AdapIT (ADI) was a market darling, but its share price has pretty much halved over the last year. This is perhaps because of the global tech sector de-rating, South African small caps de-rating further and its local ‘big brother’ EOH getting its own stock smashed (see here). It could also be because the Group reported HEPS growth of +2% for H1:17 (but, Normalized HEPS actually grew +20% y/y). I am expecting this trend to more or less continue and expect full FY 17 HEPS of 58.3cps or +1% y/y (Normalized HEPS should be +15% to +25%), yet look towards the Group’s amazing cash generation. I expect cash conversion to be near to 100%, implying that the Group is trading on a cash-based multiple that is much lower than the IFRS-based PE of 15.9x reported in the market.
New-Pinnacle Technology Holdings–now called ‘Alviva Holdings’ (AVV)–has recently released a good trading update. Given that the major difference between Alviva and Mustek is Alviva’s acquisition of Datacentrix, it will be key to see the difference in results between these two companies. I expect this difference to not be as big as the market seems to think, particularly as their core business models deliver commoditised tech and thrive off a strong ZAR.
These are just a few of the results that I expect from what promises to be a colourful results season coming up on the JSE…