My 2c:
- agree with
@upsidedown in essence re: positives in merchants
- better than what I was expecting due to seasonality as mentioned by
@Christos12
- drawdown on debt facility only 125m- in the audited financials it was 136m...if this is correct (unaudited) this is mind-boggling. Ie already cashflow positive after just one quarter (assuming that they are not shifting money into the receivables facility for no good reason). This basically validates the model in my mind and is in accordance with my predictions (ie profitable when annual growth is <30%, which we get a snapshot of because of seasonality)...
- as a related aside- in response to
@martincooper the terms of receivable facility are in AR - I think BBSY + ~2%.
Finally, did some quick back of the envelope calcs prior to my second averageing up (ever- the last was Xero at about $18). Assuming CY exit sales of 3.5B (only 50%growth from current run rate), other metrics being the same and about 50% operating costs otherwise gives a normaliser NPAT of about 70m. At 30x multiple you get 2.1B market cap which is approx 80% return.
- IMo these assumptions are conservative (both sales and multiples) & achievable on back of Aus/NZ alone.
The risk/reward is compelling and I think very low downside risk at these prices...
Thus I have added another 12.5% to this position which is now my 2nd largest!