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.
MM believes todays sell-off in JLG is overdone, seeing value ~$4
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