Updating this simple model with the info in the presentation today ...
- $122M current revenue running rate ($107 in FY18 + extra $15M for Elton)
- VRS seem to be targeting just a smidge above this (looking at graph) at say $125M and ...
- targeting higher EBITDA margin of 15-17% (seeking margin growth over revenue growth)
- range of EBITDA therefore ~$18 - 21M (by processing guidance info)
- Net borrowings $8M
- Unemcumbered enterprise value $90M at 23.5cps ($82 + $8M net borrowings)
So - at 23.5c VRS is trading on an EBITDA multiple of between 4.2x to 5.0x.
Another way of looking at it - EBITDA would be enough to pay off ALL borrowings ($8M), reinvest in equipment ($3.6M at current depreciation rates), pay tax (zero with past credits?) and have $6-9M to reinvest or give back to shareholders! If given back, dividend would increase to between $0.015 to 0.025 ... or 300 to 500%.
Consensus TP was 33c before this presso - will be interesting to see if analysts upgrade.
Any holes spotted in above calcs?
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