Bird Construction Inc T.BDT

Alternate Symbol(s): BIRDF

Industrials Conglomerates

Bird Construction Inc. is a Canadian construction and maintenance company operating from coast-to-coast-to-coast. The Company provides a range of construction services from new construction for industrial, infrastructure and institutional markets; to industrial maintenance, repair and operations (MRO) services, heavy civil construction and mine support services; as well as vertical infrastructure including, electrical, mechanical, and specialty trades. The Company uses a variety of contract delivery methods, including construction management, cost plus, integrated project delivery (IPD), alliance, progressive design build, stipulated sum, unit price, standard specification design-build, alternative finance projects, complex design-build, and public private partnership (PPP) contract delivery methods. It specializes in civil infrastructure construction across a wide array of projects, such as airports, seaports, rail, bridges and structures, earthworks, energy projects, and utilities.

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Post by retiredcfon Mar 12, 2021 8:52am

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Post# 32783817

TD Upgrade

Bird Construction Inc.

(BDT-T) C$8.95

Q4: Near-Term Pressures, but Constructive on Medium/Longer- Term

Event

Bird reported Q4/20 results and provided outlook commentary. Impact: SLIGHTLY NEGATIVE, but target up on expanded sector

valuations

Headline Q4/20 adjusted EBITDA was $40.0mm, although we note that this amount includes a $21.7mm CEWS benefit (vs. our forecast of nil). Adjusted for this amount, Q4/20 adjusted EBITDA was $18.3mm (3.3% margin) — modestly below consensus of $21.1mm (3.7% margin) and also below TD at $23.6mm (4.2% margin).

However, had Bird not received the aforementioned CEWS amount, we believe that it would have found alternative cost-saving means to help offset the revenue pressure in Q4/20 (i.e., layoffs, reduced worker hours, etc.).

Revenue was $555.0mm vs. consensus of $573.8mm and our $560.4mm estimate. Organically, revenue declined ~25% y/y, primarily due to delays in securing new projects and client-driven project delays as a result of COVID-19.
Encouragingly, backlog increased to $2.68bln (vs. $2.59bln at Q3/20), +4% q/ q. Organically, backlog increased ~9% y/y.
Outlook: Bird anticipates that governmental restrictions will result in further project delays in the first half of 2021, shifting portions of the work program into the second half of the year and into 2022, which will negatively affect both revenue and gross profit in the year. Bird highlighted a lower margin profile in components of the acquired Stuart Olson backlog and, as such, expects sequentially lower consolidated margins in the near term, compared with 2020.
Our 2021 EBITDA estimates decline, driven by a combination of lower revenues and margins (primarily in H1/21), and we have introduced our 2022 estimates. Our target price, which is now based on our 2022 EBITDA forecast, increases to $10.50 (from $9.00).

TD Investment Conclusion

Although COVID-19-related impacts are expected to weigh on Bird's near-term performance, we remain positive on the company's medium- and longer-term outlook, supported by the level and composition of current backlog, new awards prospects, and margin improvement potential over time.