"yep……and that is the number. And it is growing at…..12% yes 12% pa. Nowhere near the 30% that others hope for."
Yes, but remember that Attributable NPATA (to which that 12% growth figure relates) is cycling a strong pcp base (which, if memory serves, grew at 25% on its pcp), so as always some context beyond what happened in just one 6-month period is required.
"And using npat PE is at 100 times."
Now you are getting a bit naughty by cherry-picking different figures to suit the particular argument you are trying to make.
Before, when pointing to the 12% growth, you referenced NPATA; now you reference NPATfor discussing the P/E multiple.
As you yourself stated in an earlier post, Attributable NPATA is the relevant metric to track over time, and on that basis, LTM NPATA is $8.6m. Assuming a 12% growth rate implies a prospective NPATA of $9.6m, and the associated P/E is 50x. So half of the figure you presented.
(Don't get me wrong; 50x as a point multiple is still expensive, but it could still be palatable for the impatient investor given continued double-digit growth for a few years would chew the multiple down to somewhere in the mid- to high 20x region; whereas 100x would render it totally impossible to contemplate an investment.)
"Revenue grows for overall group but revenue is bought. The margins decline in line with revenue growth. Brett gets paid based on revenue."
Yep, revenue is acquired; it's a roll-up story.
And of course, roll-up stories do very often go awry. So, like all roll-ups, investing in them invariably involves a significant element of "Trust Management to Not Blow The Company Up" (i.e., "Trust Brett to Not Blow The Company Up" in this particular case).
Brett owns half the company (his stake is worth around $240m), so it seems like he has 240 million very good reasons to retain his laser-like focus and try his darndest to do zero harm.
So whether he earns a few hundred thousand dollars more each year for driving Revenue (if that is indeed how he is remunerated), it pales into insignificance compared to his equity value-at-risk if that acquired Revenue does not get properly converted into bottom-line profit.
I'm all for countervailing arguments being made, but I think this latest post of yours has missed the accuracy and relevance marks by wide margins.
Like you, I am somewhat bemused by the share price movement over the past 12 months.
And like you, I sense, I can't see the reason for it, and it has resulted in the stock looking overvalued today.
But I still think discussion should always be anchored in consistency and accuracy.
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