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 Reaction

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Post by retiredcf on May 13, 2022 8:38am

TD Reaction

As mentioned, they have a $47.00 target. GLTA

Park Lawn Corp.

(PLC-T) C$32.15

First Look: In Line Q1; Outlook Solid with Full M&A Pipeline Event

Q1/22 adj. EBITDA of $21.4mm (up 11.8% y/y), in line with TD/consensus of $21.4mm/$21.8mm reflecting the net impact of slightly weaker-than-expected revenues offset by stronger-than-expected EBITDA margins of 25.7% (TD: 24.7%, cons: 26.5%)
CC: 9:30 a.m. ET (888-506-0062; code: 490276).

Impact: NEUTRAL

In our view, Q1/22 was a solid result. PLC did experience a modest 2% decline in its comparable call volumes y/y as the impacts of COVID-19 have moderated. However, consistent with management's previous outlook commentary, there still does not appear to be a meaningful pull-forward impact materializing with respect to death rates (and in fact, excess deaths have continued, but not directly from COVID-19). Additionally, PLC is doing a good job taking market share and growing its average revenue per call (+7% y/y due to price and an expanded service offering), which is more than offsetting the modest y/y volume declines. Looking forward, management continues to see an active acquisition pipeline, robust pre-need sales and expects that strong operating performance will continue.

Consolidated Q1/22 net revenue increased 17.5% y/y to $83.2mm, driven almost entirely by acquisitions. Organic growth (ex. F/X) of 0.6% was above our estimate of negative 2.0% (recall Q1/21 organic growth was 21.4% y/y), with the y/ y decline in COVID-19-related deaths more than offset by higher average revenue per call. Pre-need cemetery sales remained strong with COVID-19 continuing to act as a triggering event for individuals to evaluate post death alternatives. Merchandise sales were impacted by lengthening lead times, with orders not yet delivered to customers. Revenue from recent acquisitions were lower-than- forecast.
Adjusted EBITDA margin of 25.7% was 107bps above TD: 24.7%, with recent acquisitions having stronger-than-expected margins.
Balance sheet: We estimate PLC's pro-forma leverage including recent acquisitions at ~1.8x (including debentures and leases). Q1/22 available liquidity was ~$183.0mm.
M&A: Given PLC's robust balance sheet, we anticipate it will announce a steady stream of tuck unders across 2022, with integration capacity the only major limiting factor. However, we will be closely watching industry valuations as both SCI and CSV have highlighted strong acquisition pipelines and the potential for 2022 to be an active year.