A guide to revenue potential of ACU as explanation for growth in FTE numbers. Acquisition of MVS completed just prior to the 2018 hacking incident and loss (before regaining in 2019 and 2020) of Bank mandates shows projected revenues for 2019 at $65m and EBITDA of ~$14m ($2m DA). As part of this transaction ACU diversified it's customer base to become a key player in Government alongside Commercial and Retail. This acquisition value was >$30m and therefore 1.5x ACU's current market cap.
Further diversification and growth was secured by ACU in 2018 with the purchase of 25% in it's WA joint venture partner and the larger $10.3m Acquisition of Taylor Byrne another former competitor. See notes below showing TB brought potential for a further $23m in Rev and $2m in EBITDA. At this stage ACU was on track to look towards $60-80m rev and >$10m EBITDA reasonably.
At the 2018 results presentation after declaring an increased dividend (note 19th HY Div consecutively) the board went on to project 2019 to deliver further growth. NB this was not long before the hacking incident.
At the same 2018 presentation the forecast for 2019 was set out showing $9m EBITDA ($2m DA).
It's likely important to have this as background when we consider that ACU is only now returning to 2019 revenue levels despite 90% FTE growth. Returning bank mandates and confidence from customers takes time to return. In 2021/22 ACU has capacity per above to deliver up to $60m in rev if it returns to 2019 levels of rev/FTE ratio. Alternatively, the business has options to reduce cost while maintaining revenue. Either will drive EBITDA growth I would prefer the former..
Coming back to FTE growth, ACU has clearly made up significant ground v's its competition moving from 20% of their size to 30%.
However, Revenue/FTE for ACU has declined during the period of mandate losses and recovery (19/20). It is this area that represents to me the biggest opportunity (along with use of AI/Machine learning and other digitial tools for efficiency/accuracy) for top line growth in 21/22.
Bullish.
