JCurve Solutions (JCS) - Oracle, page-6

My two bobs: Throughout 2017 I have noticed a strong trend in the valuation of ERP/Accounting Solution providers. 1x revenue is a very safe valuation in the private equity space for single digit growth organisations; 1.5x recurring revenue even more so. Values JCS at 4c-6c on FY17/FY18 numbers, take your pick. Anything lower and it would be too compelling for a bigger group not to swoop up before too long imo.

And I think that's the crux of it. Will JCS get eaten up or will it grow itself through M&A, or will it grow organically and return to shareholders. The longer this goes on, the higher the value value of this firm gets (FY19 is anything up to 10c on my calcs, FY20 far beyond imo). If it utilises its cash balance and takes on another group around 1x revenue with synergy plays then its a goer. If it grows organically and starts to distribute dividends, many here will take them with open arms.

So there's three options. Organic growth and a takeover. Organic growth and M&A. Organic growth and return to shareholders.

Yes right now the numbers suggest 4-6c value, but the board are bullish, and they have a fierce appetite for success. At >25% growth in the ERP space this will be valued along the same lines as Reckon shortly after the turn of the decade if someone doesn't swoop up the entity.

One of the great value propositions in the small cap space. I keep my investments very very private with my personal connections, but funnily enough a couple of small business owners I know have started to speak about the JCurve Solution, sometimes in the same breath as Reckon and Xero. I value their opinion in high regard. The JCS group must be doing something right!