DAVY VIEW

Cpl Resources has performed more resiliently than expected through recent months and its FY20 results are likely to be broadly in line with pre-COVID expectations as a result. Looking forward, the demand environment for Permanent recruitment remains uncertain, with limited visibility into the coming months. As such, we expect to revise our FY21 net fee income (NFI) estimates – our initial sense is that this will result in an FY21 adj. PBT cut of c.20%. With the stock down a comparable amount and trading on c.8x FY21 P/E prior to estimate adjustments (c.9.5x on adjusted estimates), we believe the current environment is already reflected in the share price and it remains at a discount to peers’ multiples.