TNT (ASX) Ann: Quarterly Activities/Appendix 4C Cash Flow Report

Originally posted by neke86: ↑

Hello,

It's true they have not guided specifically on EBITDA, but they do provide information that allows us to model a forecast and hold them accountable for performance. Take the following from the 30 August 2022 FY22 Investor Presentation:
p5. FY22 Turnover: $166m
p7. Operating EBITDA: $16.3m (TNT "normalise" this to $18.6m)
p7. Normalised EBITDA underlying growth reported as being 26% YoY
p23. Outlook for ">$200m turnover"

Guiding to exceed $200m turnover in FY23, against an FY22 number of $166m is almost exactly 20% top-line growth.
FY22 EBITDA organic growth was 26%, the numbers I posted were for 20%, so a conservative reduction in actual growth.

The reason for the wide margin in my NPAT forecast should be apparent to anyone who has followed Tesserent for a long time - management have more than $10m in undrawn funding to blow on acquisitions and they are notoriously bad at controlling expenses. If it helps, I'd put it 50% at -$2m to +$2m and 50% at -$8m to $-2m. If they stop acquiring right now and there are no unexpected D&A or other expenses, they could end FY23 with as much as $4m NPAT, but that's a lot of extraordinarily optimistic assumptions.

Given their track record, this company would be a lot better off with ANY other management, not no management.

Since Tesserent first acquired Rivium in July 2019, they have has spent $83m in cash and $50m in shares to acquire 14 businesses they claimed would generate $146m revenue and $26m EBITDA. FY22 revenue was $113m, FY22 EBITDA $16.3m, that's a huge multi-year underperformance. Literally several years of going backwards/sideways. Or they lied or were misled at each acquisition - you pick.

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I think TNT management are very much focussed on the technical side of their business, the cyber security bit, and doing that well. Their presentations look impressive to me, when they show what they do and their list of clients etc. But it doesn't seem to be running as a business to make money, let alone to generate added value for shareholders. I've just looked at their loan balance which appears to have been $35m owed for the four quarters of FY22, then it went to $37m in Q1 FY23, and now $46m in Q2 FY23. When is this going to get paid off ? They just seem to think they have a money tree. Stop making acquisitions TNT and use what you have to generate some positive cash flow to pay off the debts, that would be a good start !!!

All IMHO, DYOR