Agree that it is undervalued. The overhangs from the share issues over the past 12 months (and the current raise now) will hold the price down whilst holders and sellers sort themselves out.
Key aspect is that the company now has a sound positive EBITDA to build from. Over time debt can be added into the mix to provide a more efficient capital structure and drive share price. There is much more that management can do to grow this over FY17 on both the ATM and EFTPOS sides of the equation. In time, a few smaller players will start to cover and the investment story will become more widely known and understood.
I have said before that I liken this to Eureka - a similar story of a penny dreadful, management then developed a clear strategy (to create a portfolio of aged care beds), used a number of capital issues to get it going and get some decent EBITDA happening, then introdcued debt and have kept going with a mix of debt + equity as they continue to expand. Share price has gone from 6c to a peak of about 80c as management have driven EBITDA and earnings growth. This has potential to follow a similar journey with a clear strategy in a substantial sector (cash/payments) with great opportunity for smaller players to develop niche positions that are financially significant in their own right.
I am looking forward to the hinted at annoucements in Q1 FY17 to see what they entail and potentially be the catalyst to get this moving. It would not surprise if (assuming management execute well throughout FY17) this is not nudging 10c by this time next year on then existing fundamentals, or higher if the market starts to price in future growth.
DYOR.
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