JCurve Solutions (JCS) - Oracle, page-3

Hoofa, on what basis are you saying it is seriously undervalued?

If you assume $1.2m EBITDA for FY18 as guided and then add back the R&D spend of $1.0m (which you could argue, given many companies would capitalise it and also the R&D tax incentive will likely be claimed and add back to cash income), or $2.2m EBITDA adjusted for R&D, then it's trading on approx ~7.0x EV/EBITDA on my calcs.

What do you think it should trade on? Maybe 10.0x plus for rapid growth?

Also, I would guess acquisition is part of the plan, so what can you buy a profitable ERP services business for? 4.0x to 5.0x I guess?

With $3.5m cash and trading on a high multiple, I would like to see them announce an acquisition to add to the organic growth so they can be re-rated to a high growth multiple of over 10.0x EV/EBITDA.

With the right deal adding $6m revenue and say $1.0m EBITDA (giving annualised $20m revenue and $3.2m adjusted for R&D), you could justify a valuation of 10.0 cents FY18

Interested in your thoughts.