The pandemic was not good for SSM with a slower roll out of NBN connections, complexity and cost around staffing plus they underwent a large ~$185m capital raise at 90c (SSM had a market cap of $400m at the time) to acquire Lendlease Services for $310m – clearly a lot going on under the hood of the infrastructure services business. Their upcoming 1H results scheduled for the 24th February will determine whether or not we remain patient or move on. The most important aspect of the result is around guidance, obviously for FY22 (market is expecting net profit of $36m from revenue of $1.3bn) but perhaps more importantly around the momentum building for FY23 which is where the numbers should really kick up pushing SSM down to just 9x earnings with a 5.75% fully franked dividend yield.
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Performance update for March, stocks that drove returns & our current positioning
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Fri 19th April – ASC200 -117pts, Pilbara (PLS), Whitehaven (WHC) & Woodside (WDS)
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Market Matters Research Lead Shawn Hickman with David Koch
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Friday 19th April – DOW up 22pts, SPI down -55pts
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MM will assess SSM again post 1H22 results
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