The company often quotes Warren Buffet, perhaps we can quote Charlie Munger "“I think that, every time you saw the word EBITDA [earnings], you should substitute the word “bullsh*t” earnings". KPG statutory reported NPAT attributable to the owners of the business was $2.3M down 32% on previous half. The other "owners" being the minority owners of the underlying business units earned $4.2M - so almost twice the parent/KPG shareholders. Revenue may have grown 42% (largely through acquisition) but operating expenses grew 59%. Net debt grew to $37M and finance costs grew to $2M (+128%) in a tightening rate environment. Net debt of $37M on an accounting firm generating circa $90M in gross revenue appears high. Market cap of $200M plus but in private markets accounting firms may be valued on $ for $ of revenue or 4 to 5 times earnings less debt.
KPG Price at posting:
$4.30 Sentiment: None Disclosure: Not Held
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