Thank you for replying Tessa.
What do you think it will look like in five years? Their acquisition track record is pretty dim; below is how I try and visualize it in one graph. The stacked bar graph has the announced EBITDA for each acquisition (from when it's accretive, not announced) with 20% annual growth built on to each one. The green line is report EBITDA (with clearly visible seasonality), and the red line is statutory losses.
To get to $500m turnover in such a short time they will use acquisitions, this is clearly outlined in their management presentation. Of course, they only have $7m cash in the bank and struggle quarter to quarter for cashflow so they're going to have to:
- Do a capital raise, or
- Issue more shares to acquire, or
- Take on more debt
Have you stepped out what that means for the shares on issue, the balance sheet, and your share price?
That's why I asked you to place a value on the nearer term hypothetical, it's easier to build the numbers out and we can extrapolate from there.
