Thought it might be time to open a new discussion.
Schrole to double schools on the platform in 2 years off the back of Faria deal, 15% ARPU increase from new modules Gets them to 800 schools in 2 years. ARPU A$11.5k ARR = A$9.2m Net Revenue/Gross Profit to SCL = $8.3m 10x ARR (revenue net to SCL) = $83m 1450m shares on issue assuming full dilution from Faria stake $5m net cash Share price = 6c Assumptions: - SCL pays avg 10% referral fee on revenue to Faria.
Assumes 15% on Advantage/Connect sales through Faria, no referral fee on other products and ISS revenue share agreement expired. - Growth assumptions of net 200 schools per year primarily off the back of Faria deal. They were adding 100-150 schools per year prior to this.
Faria opens up 2850 new schools, 1000 of which identified as primary/near term targets. Net 200 schools per year could be conservative. - ARR and ARPU used in valuation includes only recurring revenue, does not include revenue from transactional (Verify) and service (Schrole Develop) revenue. Therefore this ARR portion will be high margin (c.90%).
Total revenue and ARPU will be higher and blended gross margin slightly lower as Verify and Develop are lower margin (40-50%), but 10x multiple applied only to the recurring net revenue figure.
They are cashed up (c.$6m cash post this deal) to aggressively grow, with an EV of relatively tiny $16m at the current 1.5c share price. This may prove to be the last raise they ever need to do.If they execute, SCL now has the potential to be a 5-10c stock in 2-3 years. - Capital H
If this October quarterly proves to show an increase in the revenue from Faria deal and the the aggressive expansion, following into the December quarterly. These next two quarters historically are their best performing, I'd expect this to get moving soon.
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