Ann: Chairman & MD AGM Address to Shareholders, page-5

First 5 Last

Share
Profile

Follow
Rikardo

1,568 Posts.

112

10/01/19

15:39

Post #: 37082249
Share

Originally posted by stan255: ↑

I'm looking at this more from a sales perspective instead of a net profit.

Our Chairman mentioned this in his letter - "There can be no bottom line without a top line."

At current prices, the market is valuing this at close to P/S of 1 and this isn't even taking into account future organic growth of 15-20%. Not acquisitions, ORGANIC. If we factor in acquisitions, our growth rate is over 40%!

In regards to NPAT.

As a startup, you don't want to be growing your NPAT because that just means you will be paying more tax. You want to be reinvesting all that back into the business to grow sales.

I've seen multiple short-term management growing NPAT to please shareholders in the short-term but in the long-run it damages the growth rate of the business. I believe Craig and his team would execute on what is best in the long run because management owns ~15% of the shares.

A famous example would be Amazon where their PE is over 90. You won't see a short-term management pushing down their net income that much because investors don't like it and he/she may lose their job and bonuses. Their mindset is anything with a PE over 30 = Sell.

With that said, there are two things that I would like to know:
1. Their retention rate. When you transition over to a SAAS model, retention rate is probably #2 most important metric behind sales.
2. Their cash burn and how they are going to fund it. We might see a CR in the near future. I would like to see them secure debt funding instead of CR at these levels.

Expand

Stan, great overview of your thoughts. However, (here it comes) I am all for management minimising negative cashflow asap otherwise a CR will be required.
Over the last FY they have halved the coy's cash but were just cashflow positive for the year. At the last AGM the Chairman hinted they would be investing in the business rather than trying to be too profitable. ie I suspect more salesmen/persons etc. However, they did organise the WBC $2million facility which may just be enough for them to avoid a CR. JMT

MPW Price at posting: 14.0¢ Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

Reply

Top Stories

ASX Market Close: Index flat as miners fall | June 25, 2025

Listen: HotCopper Wire Podcast 014 – Abu Dhabi wants to buy our 'true' oil and gas gem

BPH

Australia’s gas crisis is here – and dying coal plants aren’t helping

Wednesday's HotCopper trends: DroneShield in Europe, Humm sale | June 25

DEL

Delorean to begin selling carbon offsets under regulation changes

First 5 Last

Add to My Watchlist

What is My Watchlist?

A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.

Ann: Chairman & MD AGM Address to Shareholders, page-5

Top Stories

ASX Market Close: Index flat as miners fall | June 25, 2025

Listen: HotCopper Wire Podcast 014 – Abu Dhabi wants to buy our 'true' oil and gas gem

Australia’s gas crisis is here – and dying coal plants aren’t helping

Wednesday's HotCopper trends: DroneShield in Europe, Humm sale | June 25

Delorean to begin selling carbon offsets under regulation changes

Featured News