Ruralco Holdings (ASX:RHL) continues the agribusiness beats
Stock
Ruralco holdings (ASX:RHL) $3.00 as at 13/11/2018
Event
Agricultural stocks have been in focus this week with Elders (ASX:ELD) hitting it out of the park yesterday with better than expected full year numbers, while today we have seen Ruralco Holdings (ASX:RHL) beat expectations by around 7% at the profit line. The diversified agricultural company produced EBITDA of $70m vs expectations of $67m while underlying net profit came in at $28.8m vs expectations of $26.9m. The market has been downbeat on agricultural stocks and to date a number of players have produced better results than what has been expected. RHL was trading on 10.3x estimated FY19 earnings and today’s beat should see a solid rerate.
In a similar theme to Elders, the company pointed to recent efforts to diversify the company both in offering and geographical footprint as driving the result. That should also help the market become more comfortable with the business and its risks. The company guided to profit growth into FY19, without being too specific – Bloomberg consensus expects $29.4m FY19 net profit, just a 2.1% increase on today’s result.
Ruralco holdings (ASX:RHL) Chart
Market Matters Take/Outlook
