September 19

Empowering Communities: Ventia Services Group’s Vital Role in Australian and New Zealand Infrastructure

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.


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