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JLG - Johns Lyng Group

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Rising costs will no doubt reduce margins and I'm expecting to see lots of companies pointing this out when they report next.

I've been in and out of JLG since listing and I'll be monitoring the JLG chart for my next purchase.
 
JLG @ 5.32

This might get interesting. The new shares from the $65m placement to Insts should hit the boards on Tuesday. Plcmt priced @ 5.15

Recent guidance for FY13 EBITDA ex Commercial Construction is for better than FY22. They are exiting Commercial Construction - it's performance will drag the overall result down.
The M.D and founder is effusive about growth prospects for the main business - there's a hot news story.

The mode ROE is about 30% in the company's short listed history but FY22 was a big slump; I guess in large part due to the the big jump in shares from FY21 - FY22, along with a ballooning book value going from 0.29 to 1.23. So probably going to take quite a while to get back to high ROE. Guess the Insts think JLG can do it given what they're paying.
JLG were visible doing flood repair work after the Lismore NSW inundation. They do that sort of disaster stuff in the U.S too but more the tornados.

The chart looks ambivalent to me but considering the placement, I'd expect lower when this rally fizzles?

Not Held

WEEKLY
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Good morning
JLG numbers looking good today (04/02/24) 4.71% gain at the minute and yesterday, for mine. Some profit taking, who's to blame em. Nice.


Kind regards
rcw1
 
peter2 said:
Rising costs will no doubt reduce margins and I'm expecting to see lots of companies pointing this out when they report next.
Click to expand...
JLG was knocked down 13 per cent on results "not meeting expectations "

Johns Lyng Group Limited is pleased to provide a 3.5% forecast revenue upgrade and a 5.0% EBITDA upgrade for FY24, after delivering strong earnings growth for the first half of the 2024 Financial Year.

Full year forecast Group Sales Revenue has been upgraded to $1.207bn and forecast EBITDA* to $136.4m. The earnings upgrade is driven by a record volume of Business as Usual (BaU) work, supported by Catastrophe (CAT) work.

CAT revenue of $120.4m was $65.7m lower than the record result in 1H23 but represents more than 87% of JLG’s original FY24 forecast CAT revenue of $137.8m - which has now been upgraded by $40m to $177.8m accordingly.

This BaU activity contributed to strong first half earnings growth. Group EBITDA* of $69.7m includes IB&RS BaU EBITDA growth of 28.1% on the previous corresponding period (1H23) to $55.0m. Group Sales Revenue for the period was $610.6m.

The depth of JLG’s relationships with its insurance counterparties, strengthened over the period through several contract wins and extensions, and the continued expansion of its Strata network, forms the bedrock of the future growth prospects for the IB&RS division.

Although inherently unpredictable, workflows stemming from CAT events continue to exhibit larger and more enduring characteristics, with work from prior events extending into FY24.

JLG continued to deliver on its strategy for sustainable international growth, expanding its partner network in the United States and entering into milestone agreements with Allstate Insurance in the U.S. and Tower Insurance in New Zealand.

Screenshot_20240228-092838_CommSec.jpg

.
... seems volatile and a hard one to pick. But probably margins, cost +, would be healthy.. Not for me.
 
I didn't think that their report was too bad. Slight reduction in profit and earnings/share. Market was clearly expecting better. I read that one of the larger brokers noted that the disaster work contributed significantly to the bottom line and that this work will end sooner rather than later.

Opened higher this morning and I was able to sell half for a better price and will sell the rest at yesterday's low hoping that it won't get there. Yesterday's opening shock to system has lessened significantly. :nailbiting:

Edit: Forgot to mention that sentiment for the building industry is low after all the recent bankruptcies and this may have contributed to the oversold reaction yesterday.
 
with smaller caps, all it takes is one holder - insto or early Investor - to have the view that expectations ate not met & it's time to bale, and price can drop quickly. At least that's my view. And results can be the catalyst for that.
 
I've always been a fan of JLG due to many nice trade results (in 2021 - 22). However since the end of 2022 price has been thumped and has been stuck in a range for almost three years. I'm waiting for a good reversal setup. Many have triggered but don't go far before reversing.

I'm very wary of building construction companies after far too many of them have gone bust recently. It's not a sector for me now.

I get the feeling from the chart that Mgt are probably doing a good job it's just the sector is really battling with rising costs, lack of product and lack of experienced workers. All part of the Aust housing crisis we're experiencing now.
 
Market Matters arvo report today:
  • Johns Lyng (JLG) +2.23% has now chalked two days of gains following a tough period for the builder – one we’re adding to the Hitlist.
Chart looks ok. Not showing today's 2.2% rise to close @ 5.97. Looking likely to break through $6 local resistance to me.

Not Held

WEEKLY
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This selloff seems a bit of an over reaction to the lower revenue number. The lower revenue number is a result of decreased disaster recovery work (CAT). This was anticipated as recovery work ends. JLG normal business (BaU) revenue was up 9% and is anticipated to rise further next year. Disaster work is impossible to predict. JLG has more exposure to remedial work in the US.

I'm not buying into an industry that's currently in so much turmoil.
 
From Market Matters - the match out today.

Johns Lyng Group (JLG) $4.05
JLG -27.11%: The shares were hit hard today, down over 30% at the lows, due to a softer FY24 and lower revenue guidance for FY25. There are two areas to think about when looking at JLG, business-as-usual (BAU) and contributions from Catastrophes, commonly called Cat Contributions (CC’s). Todays result was weaker than expected from BAU, and below the companies prior guidance. While they delivered stronger margins, the volume of work was lower, and this trend is going to persist given the companies FY25 guidance.
  • FY24 revenue of $1,159mn was 5-6% below expectations and below JLG’s guidance.
  • BAU revenue (excl. CC) of $930mn is 7% below consensus for $997mn.
  • Underlying EBITDA of $130mn is only ~2% below expectations, however, CAT revenue of $206mn and EBITDA of $27mn were ahead of expectations, implying weakness in BAU which is what the market is concerned about.
  • They declared a final dividend of 4.7¢ a share
In terms of the outlook, they are guiding to revenue of $1,128mn (incl. CC) which was mildly below expectations, though margins are expected to be solid.
JLG​
MM believes todays sell-off in JLG is overdone, seeing value ~$4
JLG.png
 
Good evening
Guidance for FY25, was most interesting. SP hit a low low on Tuesday.

Catastrophe revenue is forecast to fall around 75% to $205.6 million, and catastrophe EBITDA could decline by approximately 77% to $6.3 million. It's possible, but who would know really, that more catastrophes could occur in FY25, leading to an increase in work in 2025 and 2026.

However, FY25 BAU revenue is expected to increase 15.1% to $1.07 billion. And BAU EBITDA is forecast to increase by 8.7% to $131.8 million. The company has also hung his hat on increasing job volume from recent contract wins etc... It's also expecting deeper market services in WA, SA, NT, Tasmania and New Zealand. There's the continuing rollout of Johns Lyng's strata services division, the rollout of additional service lines in the US, revenue synergies from recent acquisitions and additional potential acquisitions.

hmmmmmmmmmmmmmmmmm

Very sad looking chart.
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Could well be some coin made with this one. Kindly conduct your own due diligence. rcw1 going to watch some more, trading purposes only.

Not holding

Kind regards
rcw1
 
Greg Canavan of fat tail investment advisory today recced an initial position in John Lyng Group.

Not Held
But has been on my short list

DAILY
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