Ann: JAN Preliminary 1H22 Results Update, page-7

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Iloveicecreams

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16/02/22

11:38

Post #: 59605827
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Originally posted by Roy2U: ↑

It is clear that many of you are disappointed after focussing on the bottom line. I suggest that it would be better to focus on where profits are likely to be over the next couple of years, rather than profits today. I believe that this is the best way to get ahead of the market and do well with investments in these kinds of stocks.

My method for doing this is to start with the latest Gross Profit, extrapolate that based on expected revenue growth and margin expansion and then subtract the likely expenses. I intend to share this on Hot Copper once I have updated my model after the detailed results. In the interim the following is pertinent:
Gross Profit increased by 48.9% in H1 FY22. That's something to be pleased with. It has increased by 412% in just 3 years.
Operating Expenses have grown over the same 3 year period by 251%.
Op-Ex in the last two half years have grown at a faster rate than Gross Profit for very good reasons, but the 14th Feb announcement makes it very clear that this will revert to a significantly lower growth rate due to:
Head count growth occurred during FY21, leading to annualisation increase in 1H FY22. This should therefore now only grow at low single digit in line with wages increases.
Removal of Job-keeper and other Government funding has already occurred.
Increase of Op-Ex from the two small acquisitions only occurs once whereas the Gross Profit keeps increasing.
The Global 24/7 exam support team has already been established so will not contribute much to Op-Ex increases moving forward.
If Janison can continue to grow Gross Profit by > 40%, then Gross Profit for 1H FY23 should reach > $18M, an extra $5.2M in just the half-year. If Janison can keep Op-Ex under good control (for the reasons given above), then most of this increase will go to the EBITDA line.

A company such as Janison with very rapid growth in Revenue and and even higher growth in Gross Profit, has the unique opportunity to invest for growth without constantly raising capital from shareholders, in order to seize the market opportunity presenting itself.

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Thanks for sharing your thoughts. Much appreciated.
JAN Price at posting: $1.23 Sentiment: None Disclosure: Held
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