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NAN

Nanosonics Limited Reports First Half Results For FY20

Max Molinari

Max is an Equity Analyst with ASR Wealth Advisers. He has studied a Bachelor of Business and a Bachelor of Laws at the University of Technology, Sydney. Max currently holds RG146 qualifications.

Nanosonics Limited (ASX: NAN) has released its half year results to the market, for the period ending 31 December 2019. The business posted a strong first half with net profit after tax of $5.7 million, while the market expected $5.4 million. North America, the largest segment, grew total revenue by 18% to $43.8 million, while Europe/Middle East and Asia Pacific grew by 38% and 27%, respectively. The company has guided operating expenses (including R&D) of $67 – 68m for the full year. This half, NAN spent $30.7m, leaving approximately $37m for the second half. Furthermore, the company has stuck to its initial plan of launching a new product (similar, but not the same as Trophon) throughout FY21.

 

NAN

Nanosonics Limited (ASX: NAN) released its full year results to the market, for the first half of FY20. The business posted NPAT of $5.7m, above analyst expectations of $5.4m. (Credit: Nanosonics).

 

Nanosonics has historically showed seasonality in its business, where the second half is generally stronger than the first half. This announcement mentions FY20 profit phasing will now be more balanced between 1H and 2H as a result of timing of consumables sales in 1H. Based on the current run-rate of $5.7m, we now expect a full-year net profit of approximately $11.4m. This is below current consensus expectations of $12m. That being said, the largest component of a valuation is the long-term growth rate. Therefore, a small miss this year may not have as great an impact as the growth from the coming years due to this new product/further expansion.

 

NAN is trading on a PE multiple of 59x on 41% EPS growth (FY22) – this can be perceived as relatively expensive. Given the current market volatility, expensive multiples and a potential miss on full-year expectations, there may be share price weakness for NAN today.


 

Disclaimer:

This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law, we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.

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