Tag: Top Stories

While this is a promising rebound, the outlook continues to remain uncertain as the world battles a more severe third wave of coronavirus, particularly in Nanosonics’ key geographies. Our forecast for fiscal 2021 revenue growth of 19% and EPS growth of 25% is unchanged, and we think early performance is tracking in line with our full-year expectations.

Shares continue to screen as overvalued, reflecting the market’s more optimistic view of Nanosonics’ new product in infection prevention, which remains undefined but is expected to begin commercialisation in fiscal 2022.

Despite improvements in hospital access for the company’s sales team, new trophon units installed still declined 9% pcp, with 19% growth in the EMEA segment but a 10% decline in North America. We view the differing growth rates as indicative of the company finding it increasingly difficult to sell additional units in North America where it’s enjoyed most of its success. New capital sales in North America contributed 87% of the total in fiscal 2020 but fell 18% and have fallen 13% on average over the last three years.

Total installed base growth rate to slow to 10% on average over the next three years, followed by lower growth once the device patent expires in 2025 and the more easily addressable markets are heavily penetrated. We maintain our five-year group revenue and EPS CAGR forecasts of 15% and 32%, respectively.

Our five-year revenue growth forecast reflects 17% CAGR in capital sales and 11% CAGR in consumables and service.

 (Source: Morningstar)

Disclaimer

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

It’s the largest owner-operator of self-storage centres in Australia and New Zealand. This gives it another lever to increase earnings by developing centres in its existing portfolio. Its short lease terms, averaging less than two years over its portfolio, also provide it with levers such as dynamic occupancy and rental price management to generate earnings. Shorter rental agreements and reliance on its acquisition strategy make it more sensitive than the average passive REIT to a downturn in economic activity, and availability of capital.

Key Considerations

• The highly fragmented self-storage industry in Australia and New Zealand provides scope for National Storage to implement its acquisition strategy.

• National Storage is the largest owner-operator of selfstorage centres in Australia and New Zealand. Its extensive portfolio provides it with the opportunity to generate earnings growth from occupancy and revenue management and via developing existing centres.

• Its short lease terms and capital-intensive acquisition and development strategy require it to be able to access capital markets and make it riskier than a more passive REIT.

• Acquiring and developing self-storage centres in a fragmented self-storage industry in Australia and New Zealand is a key part of National Storage REIT’s strategy. National Storage operates under a REIT structure, with the consolidated group comprising a shareholding in National Storage Holdings Limited and a unit in National Storage of its storage centres are located within a 20-kilometre radius of major city CBDs in Australia and New Zealand, and about 10% of its revenue is also sourced from sale of storage packaging, design, development, and project management fees.

• Australia’s fragmented self-storage industry and National Storage’s relationships with self-storage vendors and stakeholders such as local councils provide it with significant opportunity to successfully implement its acquisition strategy.

• Its current extensive portfolio of self-storage properties also enables it to generate earnings growth via its development strategy and its dynamic pricing and occupancy techniques.

• It has had a strong stable management team with strong industry experience in the specialised selfstorage industry that has generated strong underlying earnings per share and net tangible asset growth per share since listing on the ASX.

• We believe the barriers to entry in self-storage are low. Increased competition and supply of self-storage will likely affect earnings.

• NSR’s acquisition and development strategy means it is reliant on access to the equity and debt markets. A tightening of credit markets and fall in equity markets may inhibit its ability to implement its acquisition and development strategy.

• Its short lease terms mean it is more sensitive than the average passive REIT to macroeconomic conditions such as the availability of finance and slowdowns in economic activity and population growth.

 (Source: Morningstar)

Disclaimer

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.