It’s another busy Thursday for company results, with some impressive figures feeding into a good day for share prices. Here are three from today’s batch that I think deserve closer attention.
Building boom
Building materials supplier CRH (LSE: CRH) reported a 35% surge in revenue, with EBITDA more than doubling to €1.12bn, and it saw pre-tax profit soaring to €407m. Chief executive Albert Manifold spoke of the firm’s “strong focus on cash management,” and predicted full-year EBITDA in excess of €3bn.
Results rarely come more positive than that, so are the shares worth buying? Well, the price has only gained a modest 3.3% today, to 2,550p, though the shares have been flying this year in anticipation of good things — we’re already looking at a 56% gain since 2016’s lowest point on 6 February.
But I still think they look good value, on a forward P/E multiple for this year of 19, dropping to 16 in 2017. With strong EPS growth on the cards for the two years, there’s an attractive PEG of 0.3 this year too. Analysts have a an impressive buy consensus on CRH right now, and I can see upgraded forecasts boosting that further.
A winning gamble?
Shares in gambling software provider Playtech (LSE: PTEC) reacted more impressively, putting on 4.2% to 937p after the company reported a 24% upsurge in revenue, leading to a 40% rise in adjusted EBITDA with adjusted EPS up a similar 40%. The interim dividend was lifted by 15%,
Speaking of the firm’s “industry-leading Casino offering,” chief executive Alan Jackson told us that a number of key customers are locked-in to long-term contracts. The shares are valued at 16 times forecast earnings this year, which looks good value to me considering Playtech’s longer-term potential, and that would drop to under 14 on 2017 forecasts.
This is a cash-generative business with strong margins, with dividends of around 3% looking attractive if not stunning. We have another impressive buy rating from the City folks, and I can’t really disagree with them — it’s a competitive business, but Playtech does seem to have some solid barriers to entry to help keep it ahead of the game.
Healthy results
Interim figures gave Spire Healthcare (LSE: SPI) a 2.6% boost, to 352p, with the results pretty much bang on expectations. Executive chairman Garry Watts reiterated the firm’s earlier outlook, suggesting a flat year this year with the shares now on a forward P/E of 19, dropping to 18 on 2017 forecasts. Revenue for the half gained 4.4%, though that fed through to a modest 1.9% rise in adjusted pre-tax profit.
Mr Watts did highlight the uncertainties the firm faces as a result of the EU referendum, but he added that “NHS funding constraints will continue to put pressure on waiting list targets” and listed that as an increasing opportunity for the company. Would I buy Spire shares now?
Well, cash generation is strong, the independent hospital group looks to have a solid future and it’s probably a safe investment. But a flat share price performance over the past 12 months suggests sentiment isn’t exactly buzzing. And at today’s share price, I’m not seeing any great bargain — my money would be elsewhere.
