Ocean Wilsons Holdings - Operations and markets drive good H121

Ocean Wilsons (OCN) reported PBT of $66.2m in H121 versus a loss of $1.8m in H120. Buoyant financial markets have allowed OCN’s global investment portfolio (OWIL) to swing from a loss in H120 to a strong performance. At the same time, OCN’s EBITDA grew 13% y-o-y to $79.6m and its operating profit by 23% as Wilson Sons’ (WSON) results improved as expected from recovering business levels and firmer prices. We have made some adjustments to our forecasts on the back of the results. We have kept EPS unchanged in FY21 but earnings have been cut by 9% in FY22 due to higher cost of debt assumptions. Our forecasts are equivalent to ROEs of about 8% for FY21 and FY22. OCN shares are currently trading at a significant 39% discount to their look-through value, which consists of the OWIL portfolio and OCN’s 57% stake in listed WSON.