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sbaggy

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26/09/20

07:45

Post #: 47644581
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Originally posted by rastis: ↑

Omniblend on acquisition had FY19 turnover of $30m and EBITDA of $2.25m. Omni had an inefficient facility and no room for growth in FY19 financials and most of FY20. Let's assume Omni alone can achieve $40m turnover and with the new more efficient larger manufacturing facility an EBITDA of $3.5m. Keytone Dairy have the new large facility in NZ now that could and should do similar numbers to Omni without trying too hard. Sales growth since the new NZ plant was commissioned is showing that from a low base. So expect this total business to be doing a monthly run rate of $80m and EBITDA of $7m this time next year? At say 15x EBITDA market cap of $105m equating to share price of 44c. This does not allow for the upside in their own brands being successful (that is blue sky).... instead assuming Keytone Dairy are only a boring contract manufacturer for others eg Bellamy's (I acknowledge directors are aiming much higher of course). The hard yards have been done in terms of setting up the new manufacturing facilities. Those inside the industry know there is plenty of work around to utilize that capacity.
At 22c this appears to be a buy?

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Yeah I agree with you,100%, those figures look nice and conservative to go by.
I think you're spot on!

As to their own brands, distribution is growing nicely. Only earlier this month my local IGA started to stock Tonik Pro (just two flavours) and said they'll stock Super Cubes bars soon, when I enquired. But starting just this week the bars are now being sold through a bunch more websites including Catch which is great to see!

KTD Price at posting: 22.0¢ Sentiment: Buy Disclosure: Held
6 Upvote

0 Great analysis

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