ASX:SRV

Stock Analysis Report

Executive Summary

Servcorp Limited provides executive serviced and virtual offices; and coworking and IT, communications, and secretarial services.


Snowflake Analysis

Flawless balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Servcorp's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: SRV has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.5%

SRV

4.4%

AU Real Estate

0.02%

AU Market


1 Year Return

35.0%

SRV

32.6%

AU Real Estate

14.6%

AU Market

Return vs Industry: SRV exceeded the Australian Real Estate industry which returned 32.6% over the past year.

Return vs Market: SRV exceeded the Australian Market which returned 14.6% over the past year.


Shareholder returns

SRVIndustryMarket
7 Day-0.5%4.4%0.02%
30 Day-7.7%2.1%0.2%
90 Day-6.0%-0.3%5.7%
1 Year44.0%35.0%37.2%32.6%19.7%14.6%
3 Year-22.9%-34.7%27.1%13.9%38.7%20.2%
5 Year-15.5%-32.8%34.4%12.0%50.6%17.1%

Price Volatility Vs. Market

How volatile is Servcorp's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Servcorp undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SRV (A$4.05) is trading below our estimate of fair value (A$8.44)

Significantly Below Fair Value: SRV is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: SRV is poor value based on its PE Ratio (72.9x) compared to the Real Estate industry average (16.4x).

PE vs Market: SRV is poor value based on its PE Ratio (72.9x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: SRV is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: SRV is overvalued based on its PB Ratio (1.6x) compared to the AU Real Estate industry average (1x).


Next Steps

Future Growth

How is Servcorp forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

34.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SRV's forecast earnings growth (34.7% per year) is above the savings rate (1.1%).

Earnings vs Market: SRV's earnings (34.7% per year) are forecast to grow faster than the Australian market (9.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SRV's revenue (2.9% per year) is forecast to grow slower than the Australian market (4.2% per year).

High Growth Revenue: SRV's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SRV's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

How has Servcorp performed over the past 5 years?

-24.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SRV has a large one-off loss of A$18.9M impacting its June 30 2019 financial results.

Growing Profit Margin: SRV's current net profit margins (1.6%) are lower than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: SRV's earnings have declined by -24.2% per year over the past 5 years.

Accelerating Growth: SRV's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SRV had negative earnings growth (-46.5%) over the past year, making it difficult to compare to the Real Estate industry average (-30.1%).


Return on Equity

High ROE: SRV's Return on Equity (2.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Servcorp's financial position?


Financial Position Analysis

Short Term Liabilities: SRV's short term assets (A$138.4M) exceed its short term liabilities (A$102.6M).

Long Term Liabilities: SRV's short term assets (A$138.4M) exceed its long term liabilities (A$30.8M).


Debt to Equity History and Analysis

Debt Level: SRV is debt free.

Reducing Debt: SRV has no debt compared to 5 years ago when its debt to equity ratio was 1.9%.

Debt Coverage: SRV has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SRV has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: SRV has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if SRV's debt is covered by short term assets.


Next Steps

Dividend

What is Servcorp's current dividend yield, its reliability and sustainability?

4.94%

Current Dividend Yield


Dividend Yield vs Market

company4.9%marketbottom25%2.3%markettop25%5.3%industryaverage3.1%forecastin3Years5.3%

Current dividend yield vs market & industry

Notable Dividend: SRV's dividend (4.94%) is higher than the bottom 25% of dividend payers in the Australian market (2.29%).

High Dividend: SRV's dividend (4.94%) is low compared to the top 25% of dividend payers in the Australian market (5.35%).


Stability and Growth of Payments

Stable Dividend: SRV's dividend payments have been volatile in the past 10 years.

Growing Dividend: SRV's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (413.9%), SRV's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SRV's dividends in 3 years are forecast to be covered by earnings (64.7% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

9.6yrs

Average management tenure


CEO

Alf Moufarrige 0

20.5yrs

Tenure

AU$512,226

Compensation

Mr. Alfred George Moufarrige, A.O., also known as Alf, has been the Chief Executive Officer and Managing Director of ServCorp Limited since August 24, 1999. Mr. Moufarrigeis primarily responsible for Servc ...


CEO Compensation Analysis

Compensation vs Market: Alf's total compensation ($USD339.88K) is about average for companies of similar size in the Australian market ($USD450.00K).

Compensation vs Earnings: Alf's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Alfred Moufarrige
Founder20.5yrsAU$512.23k1.61% A$6.3m
Anton Clowes
Chief Financial Officer3.8yrsAU$307.97kno data
Olga Vlietstra
General Manager of Japan0yrsAU$932.04kno data
Liane Gorman
General Manager of Australia & New Zealand9.6yrsAU$417.80kno data
Charles Robinson
Senior Vice President of USA0yrsAU$413.53kno data
David Godchaux
CEO of Middle East0yrsAU$573.35kno data
Daniel Kukucka
Chief Technology Officer0yrsno datano data
Matthew Baumgartner
Chief Information Officer0yrsno datano data
Warren James
Chief Property Officer0yrsno datano data
Steve Gainer
Head of Global Accounts - Japan0yrsno datano data

9.6yrs

Average Tenure

Experienced Management: SRV's management team is seasoned and experienced (9.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Alfred Moufarrige
Founder20.5yrsAU$512.23k1.61% A$6.3m
Roderic Holliday-Smith
Independent Non-Executive Director20.3yrsAU$109.91k0.15% A$607.5k
Robert Corlett
Independent Chairman of the Board20.3yrsAU$175.00k0.47% A$1.8m
Mark Anthony Vaile
Independent Chairman0.3yrsAU$100.00k0.021% A$83.4k
Tony McGrath
Independent Non-Executive Director0.5yrsno datano data
Wallis Graham
Independent Non-Executive Director2.3yrsAU$100.00kno data

11.3yrs

Average Tenure

69yo

Average Age

Experienced Board: SRV's board of directors are seasoned and experienced ( 11.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Servcorp Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Servcorp Limited
  • Ticker: SRV
  • Exchange: ASX
  • Founded: 1978
  • Industry: Real Estate Operating Companies
  • Sector: Real Estate
  • Market Cap: AU$392.112m
  • Shares outstanding: 96.82m
  • Website: https://www.servcorp.com

Number of Employees


Location

  • Servcorp Limited
  • MLC Centre
  • Level 63
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SRVASX (Australian Securities Exchange)YesOrdinary SharesAUAUDDec 1999
SRVCHIA (Chi-X Australia)YesOrdinary SharesAUAUDDec 1999

Biography

Servcorp Limited provides executive serviced and virtual offices; and coworking and IT, communications, and secretarial services. Its serviced offices include furnished CBD office suites with a receptionist, meeting rooms, IT infrastructure, and support services; and virtual offices provide services, facilities, and IT to businesses. The company operates in Australia, New Zealand, Southeast Asia, the United States, Europe, the Middle East, North Asia, and internationally. Servcorp Limited was founded in 1978 and is headquartered in Sydney, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/23 10:32
End of Day Share Price2020/02/21 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.