Due for an update (I thought it would have gone this week):
- update on CBI + they committed to regular reporting timelines
- enterprise wide cost optimisation (aka cut the fat on segments that they can’t launch or are high revenue & no margin( has been done by all tech companies of late with some cutting 20%-50%)
- barrenjoey strategic review (sell as a whole vs don’t sell vs sell PSCI for 1x revenue of $80m, vs sell gift cards which is the sacred cow for $400m which is 10x EBIT for G&I segment) I have left out open banking as the team there have to be commended of late in that they have been launching products and at trade shows ($4m commitment to S&M as part of acquisition ) and also using their technology to launch gift cards and other incentive programsin europe where they can’t launch GPR programs
- CEO recruitment, hopefully Kevin stays and gets on with trimming minimum 10% of costs ($14m) of which half will to bottom line due to inflation in wages from rest of company
- interest earnings update ($30m run rate as of Jan, so should be closer to $40m). Net uplift yoy of circa $10m+.
—if they can do a small 5% revenue growth next year on $230m FY23 estimated then they can expect $241m + cost optimisation + interest = $258m (+12%)underlying EBIT goes from $24m at the low point to $41m and at the high point to 51m. Any spin off of PCSIL, upside in remediation (unlikely) or relocation to Spain or Cyprus provides them with +4m in establishment fees annually + another 10% GDV growth (circa $7m+ annually),
long term holders = if you have waited this long is it better receiving $1.5-$2 today or waiting for potential remediation in early 2024? ($50m EBiT FY24 + expansion of open banking)
If you have not read Kevin’s linked in posts over the past 2-5 years + his history in turning around companies & regulatory affairs then it’s a glimpse into ‘what could be’who knows at this stage…
Not saying it will increase but for now Mr Market say $0.65
Ann: New Leadership, Operational Priorities and Strategic Review, page-89
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