Anyone's guess. The FY20 result will probably be impacted by a number of one-offs. Based on their announcements my guess is:
FY20 revenue guesstimate: ~$520m FY20 underlying EBITDA: ~$20m Take away some bad debts, likely goodwill write downs, restructuring costs, some depreciation and the headline FY20 result becomes a loss imho.
But FY21 has the potential to be a reset with the merger issues behind them. Their last update implied improved cash flow and with a trimmed cost base I'd hope that on similar revenue their implied target of $30m "underlying" EBITDA should be a bit of a doddle with less adjustments.
If this all comes to pass and the forecasts continue to trend positive (which I'm hoping given all this recurring revenue) then 26c looks incredibly cheap to me.
Alternatively they could have a single shocker project and/or the economy falls in a screaming heap and their share price is back in the teens again.
They were my first entry back in the sector after selling MND at $15 (traded in my Audi for a used Camry so to speak) but I initially overpaid here in the 30s (almost break even now) so don't rely on my opinion.
What do you think?
SRG Price at posting:
26.5¢ Sentiment: Hold Disclosure: Held
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