Ann: Trading Update, page-8

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jaluma

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18/10/22

21:45

Post #: 64265829
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Originally posted by Maccajohn: ↑

Apologies but I forgot to adjust for the exchange rate difference between NZ and Australia. So my estimates of profit in $A should be around 10-11% lower.

This is an interesting comparison between Tyro and SMP.

Tyro has a market cap of $809m which is about 5,5 times SMP’s market cap and like SMP is growing strongly.

Tyro’s guidance for FY 23 is for a EBITDA of $28m to $34m. Their first quarter revenue growth vs same quarter last year was 59% compared to SMP’s of 91%. So SMP is growing more quickly.

Based on figures in my earlier post the equivalent figures for SMP (ie EBITDA) in $A are between $20.3 and $23m FY 22 was about $10m split about 1/3 and 2/3 between FH and SH).

Using EBITDA as a measure of valuation (using mid point of EBITDA) based on Tyro’s market cap then SMP market cap would be around $A570m or a SP of about $2.40 about 3.9 times yesterdays closing price) and that ignores the higher growth of SMP.

Before the possible takeover of Tyro its SP was about about a third lower than yesterdays and that would see an SMP SP of about $1.50 for SMP on the same valuation metric as Tyro (ie on EBITDA ratio). but that ignores SMP’s higher growth rate and ignores Tyro’s signifi ant operational problems (SMP have had not any operational problems) which have caused a significant decline in its SP since last year - last October it’s SP was about 4 times the pre takeover price.

A plausible argument could be put forward that SMP should have a higher ratio to EBITDA valuation than Tyro or a SP higher than A$1.5 ( ie more than 2.5 times yesterdays SP).

Happy for anyone to check my figures and point out any significant error.

Expand

It's much easier to grow quicker off a smaller base on percentage terms.
What does the growth comparison look like when you look at transaction value?
Might be a better metric for a true comparison of the two.

SMP Price at posting: 66.5¢ Sentiment: None Disclosure: Not Held
1 Upvote

2 Great analysis

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