I'm keen on this one, thanks for your analysis mate. Looks to me...

First 3 Last

Share
Profile

Follow
Timboy

64 Posts.

2

21/02/25

20:02

Post #: 77972386
Share

I'm keen on this one, thanks for your analysis mate. Looks to me like it's got a great business model and as you allude to, it's got some cash that it could put to use for shareholders. Looking to buy in, maybe I'm blessed with a little pullback post these great results.

Originally posted by saintex: ↑

There are probably 2 elements where the market is still too cautious about this company : not recognising its ability to produce cash flows and the risk profile.

1/ Ability to generate cash flow/free cash flow
Shape has now proved its ability to produce significant free cash flow* :
.19.5 m$ in FY 23,
. 26.2 m$ in FY 24
. 29.7 m$ for H1 25.
Overall, the company has generated 75 m$ of free cash flow during the last 30 months.
It represents half of enterprise value (150 m$, with a share price of 3.22 $).

Interesting also to see what they did with these free cash flow :
. 42 % was distributed as dividend (payout of 90 % for H1 25),
. 4 % was used for treasury share purchases (for employee share plan),
. and the rest was added to the existing cash.
So, the next question may be about their ability to use this accumulated cash (118.9 m$).
According to their presentation yesterday, they'd like to do more M&A.
Difficult to know the future outcome (limited experience with M&A ?), but it should probably help them to get better return than the one they have now with their cash (around 3 %).

2/ Risk profileInitially, Shape was probably considered a high risk company, as it was very dependant on the office sector.
In fact, its risk is probably lower than this perception, essentially because the company is not dependant on a few large contracts (its average contract size is 3 m$, while it generates an annual revenue of around 1 bn$).
The company also indicates that their basis of customers comes from ASX 100 and ASX 200 companies.

The company is other diversifying across different industries. So the office sector which represented around 70 %+ of its contracts, now only represent 50 %+ of its contracts.

Another way to look at their risk management : they avoid taking orders for facades now, as there is too much uncertainty regarding the profitability of these projects.

* including impact of working capital

Expand

SHA Price at posting: $3.21 Sentiment: Buy Disclosure: Not Held
1 Upvote

0 Great analysis

Reply

Top Stories

Red flags in the market to watch: How to spot trouble before it hits your portfolio

Listen: HotCopper Wire Podcast 019 – Dreaming of the 9,000s

I88

Infini remobilising at Portland Creek after geo specialists line up 12 'priority' targets

TMG

Veteran executive to help turn Trigg into leading US-based antimony producer

Monday's HotCopper trends: Boss guidance, Botanix quarterly | July 28

First 3 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.

(20min delay)
Last $4.14		Change -0.040(0.96%)		Mkt cap ! $345.6M

Open	High	Low	Value	Volume
$4.19	$4.19	$4.12	$24.9K	6.012K

Buyers (Bids)

No.	Vol.	Price($)
1	13	$4.13

Sellers (Offers)

Price($)	Vol.	No.
$4.14	64	1

View Market Depth

No.	Vol.	Price($)
3	2415	4.120
2	4048	4.110
2	168	4.100
2	54	4.090
2	4160	4.080

Price($)	Vol.	No.
4.140	64	1
4.150	132	1
4.180	2239	1
4.190	7138	1
4.240	109	1

Last trade - 13.38pm 28/07/2025 (20 minute delay)

SHA (ASX) Chart

I'm keen on this one, thanks for your analysis mate. Looks to me...

Red flags in the market to watch: How to spot trouble before it hits your portfolio

Listen: HotCopper Wire Podcast 019 – Dreaming of the 9,000s

Infini remobilising at Portland Creek after geo specialists line up 12 'priority' targets

Veteran executive to help turn Trigg into leading US-based antimony producer

Monday's HotCopper trends: Boss guidance, Botanix quarterly | July 28

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

I'm keen on this one, thanks for your analysis mate. Looks to me...

Top Stories

Red flags in the market to watch: How to spot trouble before it hits your portfolio

Listen: HotCopper Wire Podcast 019 – Dreaming of the 9,000s

Infini remobilising at Portland Creek after geo specialists line up 12 'priority' targets

Veteran executive to help turn Trigg into leading US-based antimony producer

Monday's HotCopper trends: Boss guidance, Botanix quarterly | July 28

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News