Green Landscaping Group: Swedish weed now rooted out - ABG
Q3: 3% org. sales growth, 6% adj. EBITA growth, strong cash flow
'24e-'26e adj. EBITA up 3-1%; 7% CAGR '23-'26e
12-9x EBITA '24e-'26e, 5-10% FCF yields
Solid growth, loss-making project now behind us
Green Landscaping Group (GLG) delivered a solid Q3 despite the still-challenging market, as organic sales grew 3% (ABGSCe 0%, FactSet cons. +1%, +5% Q2'24), while margins remained stable y-o-y (8.9% vs. 9.0%) with strong cash flow considering seasonality. This yielded 6% adj. EBITA growth (+6% vs. ABGSCe -3%, cons. +5%), which we expect will accelerate to +11% in Q4. In addition, the loss-making Swedish project was completed in September, which further raises the likelihood of improved margins. We continue to expect GLG to maintain its resilient growth profile (1% org. growth in Q4, return to >4% Q3'25e) and deliver a gradual uplift in margins (excl. Q1'25 due to tough comparables), while solid cash flow also in Q4 should yield a YE'24e gearing of 2.8x. This in turn should support >10% earnings growth potential from 2025, considering GLG's active, and margin-accretive, M&A agenda.
Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/green-landscaping-group/Equity-research/2024/10/green-landscaping-group---swedish-weed-now-rooted-out/
