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Bearwolf

981 Posts.

153

07/12/21

16:20

Post #: 58134866
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Originally posted by saintex ↑

Looking into more details at MBH since HGA acquisition, I realize that this acquisition has completely modified Maggie Beer Holding profile.
Based on FY 21 pro forma figures, HGA represented 42 % of MBH revenues and 78 % of EBITDA.

I have to recognize that I was sceptical about this acquisition initially for 2 main reasons :
- rather average track record with acquisition for Maggie Beer Holding (ex.Paris Creek still not profitable, 3 years after its acquisition)
- risk that HGA business growth was mainly driven by covid (strong acceleration of the business during FY 21).

Since its acquisition, HGA has continued to have a strong performance : + 63 % for Q1 22 sales (vs what was probably a high basis of comparison as HGA increased its sales by 98 % in FY 21).
Other element regarding the stability of HGA growth : 30 % of customers for The Hamper Emporium are repeat customers (22.5 % for Gift Australia).

Unlike MBH which struggled to get a regular growth before this acquisition, HGA has a different profile :
- regular top line growth since FY 18 (apparently organic only),
- high level of EBITDA margin, which keeps increasing (from 17.1 % in FY 18 to 26.2 % in FY 21),
- "high level of cash generation*".
MBH got also a good price for HGA as they only paid 4.2 x EBITDA 21 (before earnout).
This low price was explained by 2 elements : base earnout (can increase the price by 25 %) and part of the acquisition paid in shares (so the HGA owners remain associated with future success of MBH+ HGA).

Interesting also to note that, since MBH published its Q1 22 results (9/11/21), 2 directors have been buying more shares on the market, while its main shareholder (Perennial) has also increased its holding (while Ellerston has sold 2 million shares on 10/11/21).

* I still can't find HGA past Capex.

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Market has definitely (not for much longer) failed to recognised what MBH has already become and what the future holds. BTW, Ellerston is basically James Packer group companies. Exit wasn't the greatest timing since the share price rose substantially afterward -- leaving a fair bit on the table.

MBH Price at posting: 51.5¢ Sentiment: Buy Disclosure: Held
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(20min delay)
Last 5.8¢		Change 0.000(0.00%)		Mkt cap ! $20.54M

Open	High	Low	Value	Volume
0.0¢	0.0¢	0.0¢	$0	0

Buyers (Bids)

No.	Vol.	Price($)
2	27577	5.5¢

Sellers (Offers)

Price($)	Vol.	No.
5.6¢	16415	1

View Market Depth

No.	Vol.	Price($)
2	27577	0.055
1	21950	0.054
1	2500	0.053
2	292307	0.052
8	199307	0.051

Price($)	Vol.	No.
0.056	16415	1
0.057	25224	3
0.058	140493	2
0.060	69672	2
0.062	35000	1

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