Hi JCoure
I would see anything less than 20% sales growth as a 'lose' situation.
The AUD/USD exchange rate has has improved from an AUD reporting perspective. The average exchange rate for 6 months ended 31-Dec-13 was 95.33c, compared to the average AUD/USD rate of 92.41c for the 6 months ended 31-Dec-14. Sales should increase on currency movements alone.
At a 20% p/a compounded sales growth, my modelling spits out a -9% p/a return based on my 78c buy price and the following assumptions:
- 65% gross profit margin
- 7% annual increase in overheads
- Tax rate of 30% from year 1
- Trading on a p/e multiple of 22x in year 5.
This is my bear case scenario and the assumptions could obviously be tweaked. For example, I were to assume:
- 70% GP margin
- 5% annual increase in overheads.
- 0% tax rate (carry forward losses utilised)
- Trading on a multiple of 25x in year 5.
My return would be an estimated 5.86% p/a over the 5 years. Still hardly impressive and if you bought at the current price that return drop into the the negative again to -3.35%.
Note: The above return doesn't account for possible dividends or cash held, but arguably a p/e of 25 would account for some cash on hand.
If I assume a 30% sales growth (ie: FY19 sales of ~$80m), using the above two scenarios my forecast return increases to 13.37% pa and 30.70% pa respectively based on my 78c purchase price, or 3.5% and 19.32% p/a on todays price of $1.23.
$80m would represent only 27% of their potential market ($300m as stated by NAN), so there is potential to extrapolate those numbers out further. In the interests of conservativeness I'll stick to $80m and 5 years.
Regards
Gralynchett
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Last
$3.73 |
Change
0.000(0.00%) |
Mkt cap ! $1.130B |
Open | High | Low | Value | Volume |
$3.75 | $3.86 | $3.67 | $5.538M | 1.476M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 6000 | $3.73 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$3.78 | 1302 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 6000 | 3.730 |
1 | 4413 | 3.720 |
3 | 19627 | 3.710 |
1 | 4413 | 3.700 |
1 | 4413 | 3.690 |
Price($) | Vol. | No. |
---|---|---|
3.780 | 1302 | 2 |
3.790 | 13853 | 2 |
3.800 | 209 | 1 |
3.810 | 209 | 1 |
3.820 | 209 | 1 |
Last trade - 16.10pm 27/09/2024 (20 minute delay) ? |
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