Broker price target upgrades, page-7

@grjohnson, my analysis agrees exactly with your projection of $140M ACV by December 2021, with a $63M and $77M split between NA and ANZ.

For the benefit of others, I am happy to share my projections over the next 2 years:

Firsly my assumptions used for my projections:

1. Growth in ANZ ACV increasing from 12% to 13% over this 2 year period
2. Growth in NA ACV increasing from 34% to 36% over this 2 year period
3. These assumed ACV growth rates equate to growth in Group ACV at 19% in FY21 and 22% in FY22. Note NEA target is for growth of 20-40% in ACV over medium to long term, so there is room for my estimates to be exceeded.
4. Half year group revenue = 52% of previous half year ACV
5. NEA payments and capture costs will be matched by cash receipts from customers, in accordance with recent guidance for starting and ending FY21 cash balances

Now for my projections based on these assumptions:

1. Group ACV will reach $126.8M by June 2021 and $155M by June 2022.
2. Group Revenues will reach $115M by June 2021 and $138.7M by June 2022.
3. Additional cash generation (compared with FY20) will be $18.4M in FY21, and an additional $42M in FY22, for total additional cash of $60.4M over the two years. This is a substantial amount and it appears it will be used to ensure growth trends towards the mid-point of the target levels over the medium term (30%). All this should happen without any need for further capital raisings, unless NEA decides to expand its regions.
4. At NA growth rates of around 35% (conservative as this results in the lower end of target growth over the next 2 years), NA revenue will be doubling every 2 years. If so, then NA revenue should reach approximately $72M in FY22 and $140M in FY24. I expect the ANZ business to generate revenue of $76M in FY22.

From then on, NA will accelerate way ahead of ANZ, and become the primary valuation driver. What price for the NA business growing at 35% or more compound with still only a very small proportion of the total market, and heading to $140M revenue by FY24?