Ann: Halo Food Co Acquires The Healthy Mummy, page-26

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940 Posts.

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15/02/22

13:37

Post #: 59582160
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Originally posted by Access2020: ↑

You mean this??

I'm sure you know this already but for the benefit of others, we don't know the absolute marketing spend. Given the high growth, there's likely some scale efficiencies here.

But for arguments sake, let's say that EBITDA in FY2021 was positively impacted by covid, one-offs, PE tricks etc.

What's the downside and how bad can it be??? (Let's talk facts)
1. Digital subscriber growth looks to be at least 20% higher than the end of FY2021 - and that's just until January!!!

2. So in FY2022 YTD, 39% of revenue - call it $8.2m ($21m * 39%) is already up +20%. That's $1.6m extra in sales at 100% GP margin.

3. Plus we've got $800k in immediate cost synergies

So, for EBITDA to FALL in FY2022 there needs to be something to offset $1.6m in new gross profit and $0.8m in cost synergies aka as net profit as that flows straight to the bottom line. Presumably there's tax losses in the TargetCo, so there's a tax shield too. That's a pretty good buffer to start with,

I'll gladly sit on the other side of the debate and say that I think there is upside in earnings from the TargetCo and some of the numbers in the pack presented support this thesis.

While not directed at you @Klue there do seem to be a lot of disgruntled ex or non holders. For a new investor like myself, this is contrarian bullish. The same goes when everyone on a thread is way too positive and confirmation bias kicks in. That can be a good time to lighten.

All IMO

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You probably want to do some research on paying subscribers v digital subscribers. 1 in 3 is the very best it could be, probably 1 in 5.
$4-5m increase in manufacturing suggests only only 2/3 of product that HLF can manufacture.

HLF Price at posting: 10.0¢ Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

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