Ann: Ceasing to be a substantial holder from FOR, page-8

Hi there!

Fyi, Forager's Australian fund is actually a closed ended LIT so Forager does not need to deal with redemptions. Rather, their LIT (ASX: FOR) trades at a discount or premium to NAV, similar to LICs. Having said that, Forager has been pretty aggressively buying back units of ASX: FOR recently to close the discount to NAV in order to reintroduce the dividend reinvestment plan, which doesn't make sense at large discounts (10%+) to NAV.

As for MSL's latest trading update, here were my thoughts which I had written:
The trading update was okay but not overly positive. The share price had jumped ~9% on the day of the announcement, which was actually surprising. I think this was due to a combination of an up day in the market, depressed share price and good growth in the headline numbers.

However, beneath the strong headline numbers, I actually think this trading update wasn’t as positive as it first seemed. Digging deeper into the numbers, H1 revenue was $16.909. FY revenue of $32-$33.5m means that the H2 revenue was $15.1m-$16.6m, which is lower than H1 revenue. In the half yearly report, the company also reported “Pro forma revenue and profits for the combined entities if the acquisition date (of OrderMate) had been at the start of the reporting period is estimated at a revenue of $18.5m and EBITDA of $2.5m for the half.”

During H1, OrderMate only contributed 3 months to revenue and EBITDA. Given that during H1, OrderMate contributed 6 months to revenue and EBITDA, H2 revenue being $15.1m-$16.6m seemed somewhat negative.

As for EBITDA, assuming the FY EBITDA guidance of $5.0m and $5.2m is before government subsidies, H2 EBITDA would be $2.8m - $3.2m. This is healthy. Presumably, the lower revenue from H2 was due to lower installations, which tend to be lower margin revenue, hence why H2 EBITDA remains healthy but the thing is, recurring SaaS revenue comes after installations so lower installation revenue in H2 could potentially impact ongoing recurring revenue.

In H2 FY22 there have been 151 new SwiftPOS sites won and 68 new OrderMate venues” This is decent but to put it in context, MSL reported a total “5,160 SwiftPOS customers and 2,400 OrderMate venues” It would be important to keep an eye out for the total number of SwiftPOS sites and OrderMate venues at the end of FY22 to see if the sites/venues actually grew or not.

Nothing about America in the trading update.

Will need to wait for the full year results to get further clarification.