Johns Lyng shares rally as Morgans lifts earnings forecasts
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The news: Shares in Johns Lyng Group rallied on the ASX after the building services provider announced the acquisition of an 87.5% stake in Keystone Group on Monday, and as New Zealand investor Fisher Funds Management raised its stake in the group.
The numbers: Johns Lyng shares were up 3.7% to $3.55 by 1:30pm AEST, having closed 0.9% lower Monday, following the announcement of its $69 million outlay on Keystone Group.
Morgans analysts said that incorporating the Keystone acquisition into their forecasts sees Johns Lyng's EBITDA upgraded by around 7% between FY25 and FY27, while an increased level of debt to fund the deal sees their earnings per share forecasts increase around 4%.
Meanwhile, the Victoria-based group disclosed that major shareholder Fisher Funds Management had bought up 3.1 million additional shares in the company, for $10.9 million, taking its interest from 6.49% to 7.59%.
The context: Morgans analysts described Keystone as "highlight complementary" to Johns Lyng's existing insurance building and restoration services business.
They noted that it provides further scale to the group's domestic operations, particularly in Queensland, as well as increased exposure to commercial and large loss claims work.
The source: ASX announcement
