OK - for those of you who are bleating on about a high PE ratio:
1. Average contract term = 38months therefore visibility on contracted forward revenue for 12 months is circa 75% = defensive stock
2. Near term growth (from presentation) 25% - 30% with medium term 20% - 25% driven mainly by penetration of online document management not reliant on the industry growing = growth stock
3. "Hidden" profitability is R&D ($10M) + Sales&Marketing ($36M) / Sales ($82.5M) = 55.8% Sales. No sane person would take these to zero with the growth profile of Aconex but both these expense lines should be seen as highly manageable.
4. FY16 rev of say $110M with NPAT of $6M + 75% of "hidden" profitability (which really is going towards growth & market domination) = $6M + ($110M x 55.8% x 75% x 70%tax effected) = $38.2M
5. Therefore current PE without deploying growth capital = $863M mkt cap / $38.2M normalised NPAT = 22.6PEHow-d-ya-like-them-apples!!
Just my opinion DYOR of course but I got in on the IPO and have not sold a share.
ACX Price at posting:
$5.15 Sentiment: Buy Disclosure: Held
