CTD acquire largely businesses with largely manual systems and introduce their IT over time to boost the TTV conversion to EBITDA. That is their acquisition business model.
When LOTUS was purchased the TTV conversion was an extremely low 0.5%. Even if the Texas business has an EBITDA conversion of 1.5% (CTD would be loathe to buy a business with a rate that high) lets take a look at Joes figures.
He extrapolates TTV to be $SUS191.7 million say at a 0.68 conversion rate $A282 Mill.
A TTV of $A282 mill conversion of 1.5% gives an EBITDA of $A4.23 million.
Now according to the ann the initial payment is $US18 mill or $A26.5 million which is 6 times net profit. This means that net profit is $A4.4 million.
So using Joes extrapolated TTV EBITDA is smaller than NPBT. Impossible.
Using Joes figures JP would have had to have had a brain fade to pay $A53 mill for the business as there would be little EBITDA growth in it for CTD.
The vendor has likely pushed for a NPBT method of value because their TTV conversion is low. Its likely a fair bit less than 1.5%.
Joe's figures once again make no sense at all.
The Coronavirus panic may well see the protests lose impetus. This will see Asian growth resume once the virus issues subside.
Once we get through the Asian issues we should see the CTD bull run again. Just like covering shorts have provided fuel for the SPX bull after dips so will the shorts provide the fuel for the next CTD run.
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Price($) | Vol. | No. |
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13.050 | 9120 | 3 |
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