Ann: Quarterly Activities/Appendix 4C Cash Flow Report, page-4

For me, while this quarterly report didn't shoot out all the lights, it passed muster.

While cash receipts in MQ22 were up 70% on pcp, they actually fell 8% compared to DQ21.

However, DH21 receipts included an effective one-off cash receipts of $0.6m for a large project PTG did for one of its clients, so if you strip that out, then MQ22 cash receipts were 4% higher than DQ21.

And while that doesn't sound like a lot, on an annualised basis it is 17% pa, which is healthy, especially for a company whose EV/ARR is only a little over 3 times.

Of course, ordinarily comparing cash receipts over a short time frame of mere quarters in order to assess company performance is not a precise science due to potential timing differences:  the underlying growth in cash receipts in MQ22 could just as easily have been zero or 8%.

But for PTG the level of disclosure is sufficiently granular that we get to see the the operational drivers of organic growth, which fared as follows in the quarter:

1.  Products Per Account:  +3.2%  on DQ21
2.  Number of Accounts (# Accs.):  +1.7%
3.  Average Revenue Per Account (ARPA): +5.3%

Combined, items 2 and 3 are the determinants of the underlying organic growth trend suggesting the underlying growth in the quarter is # Accs. growth multiplied by ARPA growth = 1.017 x 1.053 = 1.07,  so 7.1% underlying growth.

It warrants acknowledging that the biggest risk to PTG's long term organic growth is if the TAM shrinks due to a big slowdown in the property market which sees a permanent outflux of real estate agents.

But even then, it will be a case of perception rather than reality, because software spend in the real estate agency industry has traditionally been relatively stable irrespective of market conditions.




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