Adbri Limited

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Adbri Limited (ASX: ABC) is engaged in the manufacturing and distribution of cement, and cementitious products, lime, premixed concrete, aggregates, sand, and masonry. The company’s reportable segments are Cement, Lime, Concrete and Aggregates, and Masonry.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~49.18% of the total shareholding. Barro Properties Pty. Ltd, and Barro Group Pty. Ltd holds a maximum stake in the company at ~32.99% and ~4.97%, respectively.

1.4 Key Metrics:

During FY21, the company recorded an ROE of 9.4% against 7.8% in FY20. In addition, the current ratio stood at 2.30x as compared to 1.44x of the industry median. Below captured the trend of net margin and cash cycle days. 

Section 2: Financial Highlights

2.1 Insights of FY21:

2.2 Segmental Highlights:

During FY21, ABC achieved growth in cement volumes despite temporary government lockdowns, which resulted in Victoria's construction sector's closure. Below captures the segmental revenue break-up:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 25, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.

Disclaimer

Kalkine New Zealand Limited is authorised to provide general advice only. The information on this website does not take into account any of your investment objectives, financial situation or needs. Before you make a decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement from the product issuer. You should consider the appropriateness of advice taking into account your own objectives, financial situation and needs and seek independent financial advice before making any financial decisions.