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PYG

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99.0¢ paygroup limited

couldn't have said it better... great detail and summary... HY...

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Twodogs196

870 Posts.

369

11/06/22

16:57

Post #: 61958515
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Originally posted by Roy2U: ↑

The following is my summary (with some analysis andconclusions of my own) from both the FY22 Results Presentation and the FY22Results Webinar on 31 May, which I listened to in full:

Organisation/Strategy

ThecorefocusgoingforwardwillbeinEBITDAandNPAT.
TherearenoacquisitionsbeingconsideredbytheBoard.PayGroupisveryhappywiththetechnologysetthattheyhave.
TherewillbeadecreaseintechnologyspendinFY23,assignificantinvestmentshavebeenlargelycompleted.
PaygroupinvestedalloftheincreaseinGrossMargintoSalesandMarketingstaffinFY22,whichshouldunderpinstronggrowthgoingforward.
LTV/CAC(Life-timevalue/Customeracquistionscost)iscurrently15.8.Thismeansthatthegrossmargingeneratedbytheaveragecustomeris15.8timesthecostofacquiringthatcustomer.Thismayincreasefurtherifcustomerscanbelockedinforlongerorifmorecustomersare wonbyGPPreferralsorupsellingtoexistingcustomers.
PayGroupoffersnodiscountsorincentivesforGPPreferrals.GPPgivesPayGroupaproxysalesforceforfree.
TalentManagementisastrategicsellingdifference.

Growth

The44%ARRgrowthinFY22wasallorganic(IWSARRwasincludedinFY21reports,eventhoughrevenuewasonlycontributingfor11monthsofFY22).
Thesalespipelineis7xlargerthanthistimelastyear.
Thesalesmomentumafterthefirst2monthsofFY23hasalreadyexceeded1QFY22.

Outlook

Basedonhistoryoverseveralyears,FY23revenueshouldbeclosetoFY22ARR,or$39.1M.
AdjustingFY22revenueforafullyearofIWScontributionaddsapro-rataamountof$0.48M,forFY22pro-formarevenueof$27.6M.ThisrevealsalikelyFY23revenuegrowthrate of(39.1-27.68)/27.68,or41%.Thisisalmostidenticaltothepro-formarevenuegrowthinFY22(39%).
Astheproportionofrevenuederivedfrommonetisationsourcesincreases,thenrevenueislikelytoexceedthepreviousFYARR,asmonetisationrevenueisalmostimmediate.
Basedonlikelyrevenuegrowthandknowngrossmargin,grossprofitislikelytogrowbyapproximately$8MinFY23.BasedonPayGroup’sstatedintentiontonowfocusonEBITDAandNPAT,theyarelikelytomovemuchoftheincreasedGrossProfittotheEBITDAline.A50/50splitbetweeninvestmentinexpenses(e.g.staff)andprofitwouldmeana$4MriseinEBITDA,morethandoublingfrom$3M(normalised)inFY22to$7MinFY23.
Strongmediumtermtailwindsfromhighemployeechurn,rampingupof monetisationandGPP(newEUpartnerSDWorx),cross-sellingtoexistingcustomers,softwareandtechnologyenhancements,andstrongerpenaltiesfromWageTheftdrivingmovetoexpertservices.

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couldn't have said it better... great detail and summary... HY numbers out October hopefully will be good enough for the market to start paying attention and re rate ...
PYG Price at posting: 36.0¢ Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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