KAP’s results rise above events
Floods and unrest caused disruptions in some underlying companies, but the business as a whole achieved cash conversion of 94%
IM last wrote about diversified industrial group KAP in March, based on interim results for the six months to December 2021. With the impact of the riots felt mainly in the smaller divisions, KAP’s results reflected a strong recovery, with headline EPS up 62%. Safripol was the standout performer, with PG Bison also putting in a strong showing.
Trading at 440c, the earnings before interest, tax, depreciation and amortisation multiple looked ripe for a rerating that would take the share price higher. The buy rating had a target price of 580c, suggesting upside of 32%. The group put in a valiant effort to get there, going as high as 561c before rolling over. We are now back in the stubborn range, trading at 467c at the time of writing...
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