Despite reporting an underlying FY21 profit (NPATA) rise of 27.5% on the previous corresponding period, Morgans downgrades the rating to Hold from Add, as the stock is trading in-line with its upgraded valuation. The target price rises to $3.44 from $2.35.
FY21 revenue growth of 7.5% was primarily driven by acquisitions (4.8%), with accounting organic growth contributing 1.5% and complementary businesses 1.2%.
Total dividends (including specials) for the year were 5.84 cents, up 8.3%. Management commented that the group was “inundated” with further acquisition opportunities and further partnerships remain core to the strategy.
Sector: Commercial & Professional Services.
Target price is $3.44.Current Price is $3.47. Difference: ($0.03) – (brackets indicate current price is over target). If KPG meets the Morgans target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
