Imagine that the services division was a listed business on it's...

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01/09/20

09:49

Post #: 46977585
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Originally posted by madamswer: ↑

It looks to me like I've got this one 100% right, but for 90% the wrong reason.

My thesis - when the share price was 15c - was that the jewel in the crown was the Technologybusinesses (Perimeter Security and Access Control) on which I'd imputed a $50m value based on a 10x multiple on $5m on EBITDA, and thinking that the Services division - the runt of the litter - was basically being obtained for a negative value.

Well the star of this result - notably in JH2020 was actually Serviceswhich, at $2.1m in EBIT, exceeded the $2.06m EBIT of Technology business units (Perimeter Security = $1.81m and Access Services = $0.19m)

BUSINESS UNIT HALF-YEARLY EBIT ($M)

Perimeter Security
DH2018: -1.57
JH2019: -1.81
DH2019: +1.41
JH2020: +1.81

Access Control
DH2018: -0.74
JH2019: +0.30
DH2019: -0.56
JH2020: +0.19

Services
DH2018: -0.35
JH2019: -0.55
DH2019: +0.10
JH2020: +2.06

But as can be seen from the graphic, every one of AVA's business improved in the JH compared to DH2019 (and Services and Perimeters Security underwent nothing but spectacular turnarounds from their losses in the JH2019 pcp):

View attachment 2438183

Recognising that AVA's businesses are lumpy in nature, based on the most recent half-year, namely EBIT of $4.0m, so $8m, annualised, the company's EV is around $42m, so a little over 5x EBIT.

Or viewed another way, valuing the Technology businesses at 10x EV/EBIT, so $40m, it means that the Services business - which is running at annual Revenues in excess of $30m and annual EBIT in excess of $4m - is worth just $7m, implying EV/EBIT of around 1.8x for that business.

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Imagine that the services division was a listed business on it's own

AVA Price at posting: 22.5¢ Sentiment: Buy Disclosure: Not Held
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(20min delay)
Last 13.0¢		Change 0.000(0.00%)		Mkt cap ! $37.64M

Open	High	Low	Value	Volume
13.0¢	13.0¢	13.0¢	$76.56K	588.9K

Buyers (Bids)

No.	Vol.	Price($)
2	15905	13.0¢

Sellers (Offers)

Price($)	Vol.	No.
13.5¢	103279	2

View Market Depth

No.	Vol.	Price($)
2	15905	0.130
33	1362324	0.125
11	355098	0.120
4	80130	0.115
3	63899	0.110

Price($)	Vol.	No.
0.135	103279	2
0.140	280253	6
0.145	79851	2
0.150	247809	5
0.155	48566	5

Last trade - 10.30am 08/05/2024 (20 minute delay)


Last 13.0¢		Change 0.000 ( 1.89 %)
Open	High	Low	Volume
13.0¢	13.0¢	13.0¢	38000
Last updated 10.24am 08/05/2024 ?

AVA (ASX) Chart

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