Bullboard - Stock Discussion Forum Park Lawn Corp T.PLC

Consumer Cyclical Personal Services

Park Lawn Corporation is engaged in providing goods and services associated with the disposition and memorialization of human remains. The Company and its subsidiaries own and operate businesses, including cemeteries, crematoria, funeral homes, chapels, planning offices and a transfer service. Its primary products and services are cemetery lots, crypts, niches, monuments, caskets, urns and... see more

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TSX:PLC - Post Discussion

Park Lawn Corp > TD

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Post by retiredcf on Mar 04, 2022 8:43am

TD

This is a flash report and their current target is $47.00. GLTA

Park Lawn Corp.

(PLC-T) C$33.88

First Look: In Line Q4; Robust New Five-year Growth Target Provided

Event

PLC reported Q4/21 adjusted EBITDA of $25.2mm (up 4.0% y/y), in line with our estimate/consensus of $25.0mm/$25.5mm. Both margins and revenues were in line. The company also provided effectively in line 2022 guidance and a new five- year aspirational growth target for US$150mm of EBITDA in 2026 (implies ~15% CAGR, assuming 2021 baseline).
CC: 9:30 a.m. ET (888-506-0062; code: 490276).

Impact: SLIGHTLY POSITIVE

Consolidated Q4/21 net revenue increased 10.1% y/y to $99.5mm, driven almost entirely by acquisitions. Organic growth (ex. F/X) of 0.7% was slightly above our estimate of -2.0%, with the y/y decline in COVID-19-related deaths more than offset by higher average revenue per call (due to relaxed social distancing requirements and expanded services offering) and continued strong pre-need sales with COVID-19 continuing to act as a triggering event for individuals to evaluate post death alternatives.
Adjusted EBITDA margin of 25.3% was effectively in line (TD: 25.5%). We continue to believe that further margin expansion is possible as synergies are realized from recent acquisitions.
Balance sheet: As at Q4/21, the leverage ratio was 0.98x (1.78x inclusive of debentures) and PLC had ~$215mm of available liquidity (cash plus revolver).
Guidance: Management expects to modestly exceed its 2018 aspirational growth target of C$100mm (US$79mm) of adjusted EBITDA in 2022, before considering the impact of any potential future acquisitions. We view this as largely in line with our current 2022 estimate of $109mm (cons: $115mm, but some analysts forecast unannounced acquisitions). PLC also set a new 2026 aspirational target of US $150mm of adjusted EBITDA and adjusted net earnings exceeding US$2.00/sh.
In our view, the 2022 guidance and 2026 target should ease investor concerns related to a possible softening of near-term results due to a potential pull-forward impact related to the elevated COVID-19 related death rates in 2020/2021. Furthermore, we would highlight recent commentary from U.S. life insurance companies which have cited expectations for elevated non- COVID-19-related deaths in 2022 and beyond (i.e above 2019 levels), reflecting deferral of medical care during the pandemic, possible future complications from COVID-19 infection and societal-related issues including increased prevalence of substance abuse, among other factors.