Their numbers look ok to me. Revenues are growing at 40% which is high growth in anyone's language. If you actually look at their managed cloud revenues (AWS), its growing at 500+%. They were at $800K for 2014 H1 and $4.5M 2015 H1 - that's massive growth. And, it shows just how immature their main business is. They are just starting as Gasbag says.
Secondly, their AWS are costs are variable, so they are paid to service revenues coming in. You want to see their AWS payments going up as that means the revenues are going up - I don't see an issue there.
Clearly, this is a "people" business, so they are investing in staff to service future expected income.
If you could fault this business, its probably that it is not scalable, in that it depends on hiring more people to service new business. These types of businesses will never be valued as high as say a software business, which can be scaled world wide, without the need for additional staff investment to service new sales.
To a certain degree this is lessened by the fact that BPF revenues are recurring in nature and I would imagine, once a client is brought in and set up, the month-to-month "managing" needed is not too bad in terms of workload - so one technical employee could manage multiple clients and jobs.
In terms of them needing to do a CR - I think this is way off also, unless they wanted to use the funds to make another acquisition. They are actually profitable and at an EBITDA level will hit that $3.5m - $5.0m level in FY 2015 where the Performance shares kick in. They would have set themselves an ambitious target but a target not unrealistic to reach to get those bonus shares.
So this is a profitable business, investing heavily in staff, growing at 40%, with recurring and "sticky" revenues, trading at less that 1 x revenues. With a lack of recognition by the broader market, I think this represents an excellent buying opportunity.
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