Ann: JAN extends NAPLAN Online agreement to 2030 in $24m deal, page-6

Investors should be aware that JAN's Solutions platform is already in place with very minimal (if any) extra costs to service additional clients or expansion by existing clients on their platform. So, every extra dollar received from clients initiating or expanding on this platform will be at very high gross margins (I would expect > 90% on any additional revenue).

Example: the 14 June 2023 announcement that the Cambridge agreement added $2.5M in the last 9 months of FY23, then IMO, this should add > $2.25M to the EBITDA line. Total EBITDA from all sources in FY22 was only $1.9M. As JAN has moved to keep their costs stable (Note that organic OPEX actually declined between H1FY22 and H1FY23), most of this (approx) $2.25M Gross Profit should move to the EBITDA line in FY23.This just goes to show the value of every extra job done by Janison Solutions clients on the Janison platform.

It should also be noted that the Gross Profit margin for Assessments work done by Janison will have lower gross margins (although at still very attractive levels) as there is more work for Janison to conduct these assessments themselves. As total Assessments revenue grew at 46% in H1FY23, combined with steady OPEX, Assessments will also add very significantly to EBITDA for FY23. If we assume 60% GP margins on Assessments work, then the additional $1.8M assessments revenue achieved in 1HFY23 should add more than another $1M to EBITDA (with no increase in OPEX). This equates to an extra $2M a year.

Based on both these sources of EBITDA increase for FY23 (and these are not the only sources of growing EBITDA), FY23 EBITDA should be > $6M ($1.9M + $2.25M + $2M), more than triple the total of $1.9M in FY22. I also expect EBITDA to continue to grow rapidly from here as all the Solutions clients use the platform more, and with likely organic growth in assessments. Providing of course that Janison continues to tightly control OPEX.

All the above are my expectations only, which may end up being different, so please DYOR before making any investment decisions.