LandMark completes revenue-boosting acquisition

By Trevor Hoey. Published at Oct 16, 2018, in Small Caps

Independent property valuation and consultancy firm, LandMark White (ASX:LMW), has completed its acquisition of Taylor Byrne Holdings, further cementing LMW’s position as the largest ASX-listed valuation services business and expanding the company’s regional footprint throughout the eastern seaboard of Australia.

Taylor Byrne is a leading regional property valuation firm with 26 offices across Queensland and New South Wales.

Not only will the acquisition boost revenues by an estimated 50% — it is also set to provide earnings diversification and improved margins.

Over the coming months, LMW will work closely with Taylor Byrne and the newly formed transaction committee to integrate operations and build upon the duo’s combined capacities.

Undervalued at current levels

Management estimates that annualised revenues and EBITDA will increase by $22.7 million and $2.3 million, respectively.

Given that Taylor Byrne is a high margin business, there should be a significant bottom line impact, and management intends to provide revised 2019 earnings guidance in the coming weeks — a potentially market moving development.

With its 2018 dividend of 4.6 cents implying a yield of 8.3%, LMW is trading on a trailing PE multiple of 10.3, below the sector average of 15, suggesting it may be undervalued.

Consequently, any acquisition related earnings boost, combined with organic growth within its established businesses, should reflect attractive forward investment fundamentals.

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