Ann: DTL FY20 Results Briefing, page-11

That makes sense. I often adopt that top down high level approach and it works for me. It's obvious that clients continue to use Data 3 evidenced by the more than doubling of revenue over the past 10 years while maintaining EBITDA to revenue rationand importantly with no share dilution. That's all great but it's difficult for me to decide whether now is a good time to add to my position. Looking at historical growth rates the average is around mid single digits and with inflation it's reasonable to assume this level of growth will continue into the future. A PE of 30 seems about right for mid single digit growth in the current environment so I am leaning towards holding on tight.

How would you rate the quality of their earnings compared to someone like SHL? By quality I mean likelyhood of clients returning and level of guarantee of growth in revenue over the mid and long term. With technology I don't know how often it needs to be changed so it's difficult to estimate a growth rate. All I know about future growth is management stating their aim of 'continued sustainable growth' which could be 2% for all I know!
In the latest presentation there was talk of improving margins from services revenue. With such low margins (around 2%) even improving margins by just 1% (over a few years) would see profits go up by 50%! Add to that organic growth and NPAT could go up in the high teens for some years to come - that is my bull case scenario and the reason I am mulling over a top up. On the other hand the stock price went to over $7 from $2 in the space of 18 months and I wonder if it can come down just as fast!