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DXT — Dexterra (Alberta) News Story

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Canada's Dexterra Q2 revenue slightly misses estimates, FCF rises

Canada's Dexterra Q2 revenue slightly misses estimates, FCF rises


Overview

  • Canada support services firm's Q2 revenue rose 8% yr/yr, slightly missing analyst expectations

  • Adjusted EPS for Q2 fell to C$0.20 from C$0.23 a year earlier

  • Company saw higher free cash flow and continued U.S. business investments


Outlook

  • Dexterra expects adjusted EBITDA margins for Support Services to exceed 9% over the long term

  • Company expects Asset Based Services adjusted EBITDA margins to remain between 30% and 40% long term

  • Dexterra expects adjusted EBITDA conversion to free cash flow to exceed 50% for the year


Result Drivers

  • WORKFORCE ACCOMMODATION OCCUPANCY - Co said higher occupancy and organic growth in workforce accommodations drove revenue growth

  • BUSINESS MIX SHIFT - Co attributed higher ABS margins to increased proportion of workforce accommodation rental revenue versus installation/demobilization activity

  • ACQUISITIONS - Contributions from Right Choice and Pleasant Valley Corporation supported revenue and EBITDA growth


Company press release: ID:nNFC8GFB6C


Key Details

Metric

Beat/Miss

Actual

Consensus Estimate

Q2 Revenue

Slight Miss*

C$269.21 mln

C$270.51 mln (5 Analysts)

Q2 Net Income

C$10.31 mln

Q2 Adjusted EBITDA

C$32.83 mln

Q2 Basic EPS

C$0.16

Q2 Free Cash Flow

C$21.75 mln

*Applies to a deviation of less than 1%; not applicable for per-share numbers.


Analyst Coverage

  • The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

  • The average consensus recommendation for the hotels, motels & cruise lines peer group is "buy"

  • Wall Street's median 12-month price target for Dexterra Group Inc is C$19.50, about 25.2% above its July 31 closing price of C$15.58

  • The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 15 three months ago


Reuters Recommended Reads

  • Aug 4 - Canada's Sienna Senior Living Q2 revenue rises on acquisitions and occupancy growth

  • Aug 4 - Canada's Martinrea Q2 revenue misses, hurt by lower OEM production volumes

  • Aug 4 - TrueBlue Q2 adjusted EPS beats estimates as on-demand business returns to growth


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)

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