Been taking a look at 3PL’s recently published results as a comparison to RCL, it’s also a SaaS provider to schools. Difficult to compare as RCL not yet profitable but have accepted 3PL as near like for like.
Has been about 3 weeks since 3PL results and its SP around $1.23 being 3.066x sales per share. Using same financial metrics and relevant no. of RCL shares etc, RCL at SP range of $0.40 to $0.60 has revenue expectation built in for around $11.3m to $16.7m p.a. assumed for the medium term, say 2yrs out. If RCL makes stated FY19 revenue target of $7.5m, then needs to increase substantially again from there for FY20 and beyond. Question is can it do that kind of revenue growth and maintain, maybe?
RCL FY18 – Sales $1,756,527 for 50,000 users = $35.13 / user. Using FY19 – Target 100,000 users @ $35.13 / user = $3,513,000, will need to also substantially increase revenue per user to reach revenue target of $7.5m based on target info?
From a different perspective, 3PL has sales to exp ratio of 1.52. Using same for RCL as guide, will need to have a lot higher spend (excl D&A, R&D & IPO costs) in FY19 to get to $7.5m revenue, around $4.93m on alike basis. May not need to be at that level, but if sales don’t come in at around required level, could burn out cash quickly like tech start-ups can do.
Prospectus also names competitor’s and have taken a google look with varying info available, some also have platforms;
Have bought some since SP dropped but might now sit on sideline for a bit, hopefully get good guidance from AGM statement and buy some more then. Given FY19 target revenue 3.5x Fy18 RCL they will know if sales are at the required increased PCP rate by that point.
RCL Price at posting:
36.0¢ Sentiment: None Disclosure: Held
