Bilby Plc (BILB) is an award-winning provider of gas and electrical installation maintenance and building services to local authority and housing associations predominantly in London and the South East. The Group was formed in 2015 with a strategy to acquire businesses in the gas, electrical and general building services sectors to meet the continued demand for high quality improvement and maintenance services in public sector housing. BILB currently owns four companies which all benefit from service and operational synergies.
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On July 16th 2018, BILB published its unaudited accounts for the year ending 31st March 2018. The Group reported a 61% hike in underlying EBITDA to £6.29m, on improved margins and revenues up 23.2% to £78.8m. Basic group EPS rose to 8.61p from a 0.46p loss previously, and a final dividend per share of 2p (2017: 1.5p) was proposed, following an interim dividend of 0.5p. Non-Exec Chairman Sangita Shah said Bilby had delivered a year of excellent progress..”achieving record revenues, profitability and shareholder returns…”We have a clear growth strategy with a dedicated and focused management team to build on the progress we have made in the last financial year and to that end, we look to the future with confidence.”
The growth potential within this building services group came to the attention of VectorVest members with a Relative Value (RV) flag as far back as the start of 2018, and with share price dips in February, April and June logging across Relative Timing (RT) and Earnings Growth Rate (GRT) indicators. RV, an indicator of long-term price appreciation potential still logs BILB today at 1.63, excellent on a scale of 0.0 – 2.0, while a GRT (Earnings Growth Rate) of 40% also rates as excellent on the VectorVest stock and portfolio management system. Trading today at 126p, BILB is materially undervalued against a valuation of 204p
The chart of BILB.L is shown above in my normal format. After a strong advance during last half of 2017 the share has traded within a range during 2018. Recently the share charted a rising low which appears to be the right shoulder of an inverted head and shoulders reversal pattern. Over the past few days the share has broken northwards through the “neckline” defining the reversal pattern. This is a very positive technical signal for a further advance and confirms the fundamental view. BILB.Lis on a VectorVest Buy signal.
Summary: The impressive set of FY numbers coupled with the exceptionally high scores across a number of key VectorVest metrics highlights BILB an exceptional investment opportunity for capital and dividend growth. These strong fundamentals combine with a bullish charting configuration, adding up to a VectorVest buy rating and 204p price target.
Dr David Paul
July 25th 2018
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