Ann: Business Update, page-95

although the valuation is high at around 1bill, im not hugely worried compared to the recent disasters such as bigun/ bluesky/ get swift because:
1) they had underlying revenue from recurring activities of 50m for h1 and i guess are tracking for around 120m for the year at least, based on the growing number of new merchants/ new in store rollouts/ new customers and recurring customers. that puts them on around 8-9x price/ sales which is not bad for a high growth fintech with a long runway ahead of it.

2) underlying ebidta for h1 was 12m which suggests say 25-30mill for the full year. that makes their ebidta mtie lofty at 30-40x but one can easily see ebitda of 50mill within 2yrs and 100mill within 4-5 years even as the market matures and growth slows, because cost controls and reduced r&d plus marketing costs will drive higher margins.

3) they are already strongly underlying cashflow positive and have multiple sources of cash to invest for growth so an equity raise is unlikely

4) the US market is impossible to factor into calculation models but should be at least prescribed a small value given the JV with matrix and the massive market opportunity plus lack of a strong established competitor in the US that they would need to disrupt. i think the probability of success in the US and/ or asia and/ or europe is high.

the valuation is high but i think if the US update is very positive and the h2 numbers are strong, we should see the sp push bqck towards 7.00 in the 2nd half of this year.