Candy Club ($1+ price target): Becoming the largest speciality market confectionary brand in the US, page-107

First 107 Last

Share
Profile

Follow
Lollies

2,333 Posts.

290

19/01/21

22:05

Post #: 50288503
Share
Originally posted by T.E.P.: ↑

Hey @reach_k, see below for some high-level feedback on your questions from Keith. This information has all been addressed in previous public releases and comms, including quarterlies and the investor presentations:

As was discussed in ASX releases and investor presentations, EBITDA could get into the 15-20% range, once the business reaches higher scale ($30-$50M USD in sales), based on Candy Club's ability to scale with minimal increases to fixed overheads
As has been stated publicly, Candy Club's current fixed overhead will support a business substantially larger than the current size with minimal incremental increases to overhead. The majority of the incremental expense required to grow will be in variable expenses.
Economies of scale, new product introductions and design improvements will all add to bringing costs down and gross margins up
At a higher run rate, Candy Club could bring the operation in-house vs using 3-PL, which could further drive costs down
As highlighted by the US$50M short term target, Keith would expect Candy Club's growth rate could continue to grow at similar rates up to this target (and even beyond), given the size of the market, how quickly Candy Club is acquiring customers, their high re-order rates and the tiny fraction of overall market share that Candy Club represents. Once Candy Club achieves further critical mass, their growth could even accelerate
In terms of at what point could Candy Club's growth saturate, it is hard to answer but it would be fair to say that this issue is a long way away from the current state of play
Keith is confident that the foundations of the business will hold up as it grows. "We are doing all the right things strategically to ensure success, including strong team, product innovation, pricing decisions, manufacturing expansion and redundancy and our channel strategy"

I asked Keith the following additional question: if a liquidity event took place (acquisition), would you expect the discussion on valuation to take place on a revenue multiple or an EBITDA multiple basis? His answer was: Revenue.

T.E.P.

Expand

Of course he’d say revenue. Leads to a high cost of acquisition.

That’s not how things work in the real world though.....
CLB Price at posting: 16.0¢ Sentiment: Sell Disclosure: Not Held
Upvote

0 Great analysis

Reply

Top Stories

NAM

Olam Agri raises Namoi takeover offer to 75 cents a share and receives shareholder backing

ASN

Utah authorities sign off on Anson's lithium extraction plans at Green River

Dale Gillham's weekly wrap: US fracking support boosts outlook for Australian gas stocks

Week 37 Wrap: HotCopper likes Cuban oil; markets shrug debate off for Putin; firebrand quant says social media a market threat

VUL

Vulcan appoints investment bank and M&A veteran to board

There are more pages in this discussion • 50 more messages in this thread...

First 107 Last

Add CLB (ASX) to my watchlist

(20min delay)
Last $1.10		Change 0.000(0.00%)		Mkt cap ! $4.6M

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

Candy Club ($1+ price target): Becoming the largest speciality market confectionary brand in the US, page-107

Olam Agri raises Namoi takeover offer to 75 cents a share and receives shareholder backing

Utah authorities sign off on Anson's lithium extraction plans at Green River

Dale Gillham's weekly wrap: US fracking support boosts outlook for Australian gas stocks

Week 37 Wrap: HotCopper likes Cuban oil; markets shrug debate off for Putin; firebrand quant says social media a market threat

Vulcan appoints investment bank and M&A veteran to board

Featured News

Featured News

Candy Club ($1+ price target): Becoming the largest speciality market confectionary brand in the US, page-107

Top Stories

Olam Agri raises Namoi takeover offer to 75 cents a share and receives shareholder backing

Utah authorities sign off on Anson's lithium extraction plans at Green River

Dale Gillham's weekly wrap: US fracking support boosts outlook for Australian gas stocks

Week 37 Wrap: HotCopper likes Cuban oil; markets shrug debate off for Putin; firebrand quant says social media a market threat

Vulcan appoints investment bank and M&A veteran to board

Featured News

Featured News