News: VVA Viva Leisure Says FY23 Guidance Is Reaffirmed, page-3

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rajkume

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24/02/23

18:31

Post #: 66453942
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Originally posted by saintex: ↑

Not many comments on this one.
But it looks worth having a look, for at least 2 reasons :
- focus on the interesting demographics (young adults, average age of their customers was 32 in 2019) while this demographics continues to spend for discretionary items*,
- strong recovery for their margins during the last 4 quarters (from 13.7 % in Q3 22 to 21.6 % in Q2 23).
One of the main drivers of their margins is the utilisation rate which keeps increasing from 65.6 % in Jan 22 to 73.6 % in Jan 23.

Another thing I like : they have been able to increase prices, without affecting the level of their utilisation rate.
They increased their member fees twice in 2022 (total increase of 6.5 %) expected to cover their expense increase of 6.5 %e (like for like) in FY 23.

Good that the company reaffirmed their guidance of 28-30 m of EBITDA 23.
Reminder : market cap of 121 m (at 1.34 $), net financial debt of 12 m and 240 m of lease liabilities.

They have a rather good level of free cash flow** of 8.1 m (taking only maintenance Capex, rather than total Capex).
However, the cash flow from operation (24.6 m) look high versus the EBITDA (14 m), so I need to understand the difference between the 2 elements to see if this level of free cash flow is sustainable.

Tough element with them is the valuation, given that they have a high level of leases.
So, we have to decide if we include these leases in their debt or not, when we calculate valuation ratios like FCF yield and EV/EBITDA.
Or we can just look at the PE 23 of 14.4 (based on H1 23 annualised).
The stock has also a rather poor liquidity, so you'd better have a strong conviction if you go with this one.

Still need to look deeper at this company.

* no sign of slowdown for VVA revenues so far in H2 23
** after repayment of lease

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This is one of the stocks which does not have an handful of followers.

I for one are holiding them for a couple of years now, the fundamentals are solid but the stock is not popular and I strongly believe the SP is much undervalued.

A year back reasearch Analysts have given a price target of 2.90$ and have increased it now to 3.00$ .. before the Covid fiasco struck the SP was 2.79 when the number of clubs were nearly half of what is now.

VVA Price at posting: $1.34 Sentiment: Buy Disclosure: Held
2 Upvote

0 Great analysis

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(20min delay)
Last $1.35		Change 0.030(2.27%)		Mkt cap ! $136.3M

Open	High	Low	Value	Volume
$1.34	$1.35	$1.34	$4.045K	3.011K

Buyers (Bids)

No.	Vol.	Price($)
1	1417	$1.33

Sellers (Offers)

Price($)	Vol.	No.
$1.35	4092	3

View Market Depth

No.	Vol.	Price($)
1	1417	1.330
6	11581	1.310
2	34500	1.305
3	2501	1.300
1	806	1.230

Price($)	Vol.	No.
1.350	4092	3
1.365	733	1
1.370	7332	1
1.380	1319	2
1.385	1000	1

Last trade - 10.38am 25/07/2024 (20 minute delay)

VVA (ASX) Chart

News: VVA Viva Leisure Says FY23 Guidance Is Reaffirmed, page-3

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News: VVA Viva Leisure Says FY23 Guidance Is Reaffirmed, page-3

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