Day job has been busy so I've only really looked at the numbers today. I guess sentiment on performance will matter when you're comparing these numbers too. If I'm comparing to the trading update - this is a beat, but if I compare to my own numbers at the start of the year - it's a miss.
Documenting my expectations is useful to calibrate where I'm right, where I'm wrong and when I'm wrong, why I was wrong.
The big miss was against revenue. It's pretty clear that despite the significant orders in the pipeline, supply chain challenges impacted revenue recognition for the business. The bad news is that these sales and the associated ARR income didn't hit this year, but these are not lost and will come through in FY23 and beyond
My expenses were about in line (or slightly higher than what they came in at), suggesting good discipline in cost management
The JV made a loss vs my expectation of a profit. We can finally see some detail and it's clear I didn't factor enough of the start up costs in my numbers. Some of these will be one-off, while some will be ongoing op-ex. At some stage, I'm expecting SERIOUS inflection here
Overall, I forecast a small profit vs a small loss. As I've posted many times, it's always been about FY23 for me, but realistically, due to covid, supply chain impacts, the cream might come in FY24 noting that this year will be a lot better
If I look back at some of the milestones I was hoping for, there was one big hit and one big miss. The big hit was formal broker coverage. PAC has some good analysts and they're not getting paid for coverage, so that exceeded my expectations. The miss was I was hoping for an enterprise sale announcement. These things do take a while, so hopefully this half. This will be very material for the SP.
At some stage I'll need to update my model. With lower sales versus my last expectations, I'll need to re-base lower. A cursory glance at company guidance suggests that they should easily beat it though.
With guidance to "materially exceed FY21 EBITDA of $2.1m" we have a data point to have a lower bound multiple. At $2.1m EBITDA vs the current EV of $17.9m, the forward EV/EBITDA is 8.5x. I'd probably expect a more appropriate multiple for a high growth company at between 10x-12x.
Incidentally, Pac's latest numbers are for FY23 EBITDA of $2.0m, so they're lower than company guidance (just).
If we start to think, what could "materially exceed" look like, starting with $3m EBITDA, that would imply an EV/EBITDA multiple of 6x.
Using an 8x to 12x EV/EBITDA multiple for FY23 only (on EBITDA of $3m), that gives me a share price range of 33.5c to 47.5c, which does not take into account any growth. That would be a very simple 12 month price target. That still represents some pretty good capital growth even though the best is yet to come.
Finally, PAC upgraded their TP to 37c from 32c (see below)
It's a pretty good report and while I won't put it all up I will share some of the market intel Stephen included.
BCC Price at posting:
26.5¢ Sentiment: None Disclosure: Held
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