Ventia Services Group Limited (VNT) is an infrastructure services provider in Australia and New Zealand. It provides the services that keeps infrastructure working for the communities. Ventia has access to a combined workforce of more than 35,000 people, operating in over 400 sites across Australia and New Zealand. Ventia operates across a broad range of industry segments, including defence, social infrastructure, water, electricity and gas, resources, telecommunications and transport.
Our fair value estimate for Ventia increases 5% to $4 after strong first-half 2023 earnings and time value of money.
The Australasian infrastructure services provider delivered more than 10% growth in sales and net profit after tax for its 2023 interim result. And it says 2023 NPAT is tracking toward the top end of the 7-10% growth guidance. Ventia shares are materially undervalued, possibly due to vendor shares still overhanging the market. Our full-year 2023 DPS forecast is little changed at 17.4 cents, equivalent to a healthy 6.4% yield at the current share price, franked to at least 80%. In the longer term, Ventia targets revenue growing faster than the market at a 7-10% average. Our base case conservatively assumes a lesser rate nearer to 6%; happy to be proven wrong given our fair value is already materially above the share price. Key macro tailwinds include population growth, outsourcing volume rates, and environmental regulations.