The Johns Lyng Group Ltd (ASX: JLG) share price is starting to move higher today after the company released its results for the half-year ended 31 December 2019.
After opening relatively flat, Johns Lyng shares are up 2.68% at the time of writing to $2.67 per share.
Strong revenue and earnings growth
Johns Lyng reported group earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of $20 million. This represented an increase of a very significant 77.7% on the previous corresponding period (pcp) of 1H19.
Meanwhile, total sales revenue for the company came in at $233.7 million, a 53.1% increase on the pcp.
The company commented that this strong result was primarily driven by a consistently high volume of business-as-usual (BAU) activity in the company's Insurance Building and Restoration Services (IB&RS) segment. This segment recorded a very impressive 41.5% increase in sales revenue on 1H19.
Another major contributor to this strong result were workflows from Catastrophic (CAT) events. This mainly came from the Sydney hailstorms in late 2018 and the Townsville floods in early 2019. As a result, CAT sales revenue dramatically increased by 154.4% on the prior half-year period.
Johns Lyng also completed several significant acquisitions in the period, which are expected to be earnings accretive for the full FY20 and should drive revenues higher over the next year or two.
In terms of dividends, Johns Lyng declared an interim dividend of 1.8 cents per share, fully franked. This represents 51% of net profit after tax.
Management commentary
Commenting on the results, chief executive officer Scott Didier AM said:
"Recording 42% growth in BAU activity is again particularly pleasing. This is what the long-term success of the Group has been based on and is the basis on which we have consistently asked the market to value us."
"We've recorded increasingly high job volumes which have built momentum that has carried into the second half, and we expect this to again be a big driver of full year performance," he added.
Outlook for FY20 and previous guidance upgrade
The strong first half result is the primary driver of a forecast sales and EBITDA upgrade for FY20 which was announced in January.
The company's sales revenue forecast for the full-year is now $420 million, representing a 25.3% increase on FY19 and a 5% upgrade on previous guidance.
Meanwhile, its EBITDA forecast is now $35.6 million, representing a 53.3% increase on FY19 and a 11% upgrade on previous guidance.
