I agree... I don't understand how this business will reach its supposed target... which on its own isn't anywhere near enough to justify its valuation.
The business will come near to losing $30m this year... they literally need to ( by their own numbers) Take the book to atleast $500-600m, from $250m now to even come close to breaking even... for FY19 - That is from their own numbers, so its irrefutable... Seems pretty lofty and will require huge growth... $200m in just one year?
Once again you wonder if anyone's reading the financials, as:
a) Theyd have to raise $50m+ to support this growth (their financials suggest this) - so thats obviously coming
b) Why would you want a $600m book which does and has an effective cost of sales of 95% and makes no money?
c) Projected NPAT for FY 20, if they get the book to $700m+ is only $6.xm ... so taking normalised comps of like 8-15x PE for FY20... I am only seeing a $50-90m business.... which puts the stock at like 20-25 cents at best.
You'd think, if the goal is to justify the current val, they'd at-least get projected NP up to say $20m and EBITDA north of $30m... I suppose it would require a multi billion dollar book, so that's not really feasible...
@Christos12 @Warnie your thoughts?
OS Expansion, page-21
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