Acquisitions, page-4

Mainly because it’s a growing tech company with a large TAM and significant op leverage potential. They are guiding for US20mil of EBITDAF which is circa AUD28mil. This puts it on about a 35x EV/EBITDA multiple. These sorts of companies just simply do not trade at ‘cheap’ valuations in the current environment. Don’t think the balance sheet is much of an issue as they are currently at breakeven, with guidance of positive cash flow next year. You’re right in that it obviously does make acquisitions a little more difficult as they would need to raise equity or take on debt to do so. Having said that, if the company can continue to grow processing volumes at about 10-15% pa in the medium term (3-5 years), gross margins continue to expand towards 70%+ and the operating leverage kicks in, then it’s you would be looking at a nice return on the current SP. The AUD going lower won’t hurt either. I do agree though that the organic growth looks a little challenged going forward purely in the faith sector and I would love to see either an acquisition or an expanding of the product offering into other sectors of the ‘giving’ market. I’d personally be buying more on a decent pullback but probably wouldn’t rush in at these levels. Time will tell.