I tend to agree, madamswer. An existing trading platform would...

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9703yn

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15/02/23

13:20

Post #: 66262073
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Originally posted by madamswer: ↑

If I was on the board of a competitor seeking to consolidate this fragmented industry, I'd view SWF as being a very vulnerable target today given the lack of traction in the underlying business, the imminent disengagement of the CFO and the questions that would surely be increasingly asked around the capability of the CEO.

Out of the $30m in Operating Expenses, there are probably close to $10m in compressible fixed cost overheads available for easy harvesting in the hands of a new owner with licence to take the hatchet to the cost base ($10m is half of the $4m in Marketing costs and $17m of Staff and Admin Overheads)

Even lobbing in a bid at a ~60% premium to the current share price (so 30cps, which the Board would surely have to recommend shareholders accept given the share price last traded at that level almost 18 months ago), this would result in the business having been acquired on a little more than 6x Free Cash Flow (and with $30m of accumulated losses, that cash flow would be tax free for several years).

This company is a sitting duck; I'd be very surprised if it held another AGM as a publicly-listed company.

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I tend to agree, madamswer. An existing trading platform would definitely benefit by buying SelfWealth, or so I believe.

Staff and admin costs have doubled, in the last quarter's financials, and marketing (Mktg & Advert) almost tripled. I use the platform but don't know where this marketing has been spent, and to memory, it was a tick under $3m for the quarter.

They should up the referral program to 10 free trades, and see how that goes.

The huge growth in this sector when people were home, gave it a bit of a kick along, and even though SWF is still increasing revenue today, they are even more successful at increasing expenses.

SWF Price at posting: 18.0¢ Sentiment: Hold Disclosure: Held
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0 Great analysis

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