If they can move around 70% of the acquired FUA across to their platform and into their funds over 3 years, at existing revenue margins and cost to income ratio, I estimate a year 3 EBITDA of around $1.4m. So on a 3 year outlook the acquisition multiple is around 2.5x EBITDA.
Inflows this year have been weak, RC uncertainty and a federal election that potentially was going to throw up a few more changes than normal for investors. I note HUB have said infows have bounced back since the election. So with these weaker inflows I'm looking for them to get cash EPS close to 45cps in FY20. Still very good value here I reckon.
Isn't there some saying about long churns and large burns? Hope so anyway
FID Price at posting:
$5.08 Sentiment: None Disclosure: Held
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