Prediction, page-58

Like most on this forum, I am anxious about the SP slide. Instead of guessing, I chose to read the past announcements over and over again. The AGM presentation announced on 16 Nov 2015 provided quite a good summary of all the past events and outlook for FY16.

If we assume a no growth scenario since FY14, we will probably get the following picture for FY16:

FY14
Revenue    $90.3m

plus revenue from acquired entities (Note: figures extracted from the acquisition announcements)


Southern Radiology $37m
Olympic Park    $10.4m
Eastern Radiology $13m
Liverpool    $7.2m

That's a total of ~$160m.  Again assuming a FY14 margin of ~10%, that's a NPBT of ~$16m. Hello! This is our worst case scenario? If we hypothetically wipe out FY15's achievements, and repeat FY14, then the SP should in theory be lingering around 43 cents (average SP between Jul 2013 and Jun 2014).

Now what if there is a strong rebound in referral pattern in CY16? The most important statement in the whole presentation was:

In other words, the perceived lack of demand is artificially created just like planned economies in communist countries. You don't need me to convince you that the ageing population is growing rapidly, I can't see how referrers' attempts to artificially hold back the DI demand can be sustained.

If you have further doubt about the company, the business model, or John, watch this video of John Conidi being interviewed by Alan Kohler. Ever since watching it a year ago, I have full respect and trust in John's business acumen. If he believes a deal is worth pursuing, for example the acquisitions, investment in 3DM and Enlitic, then there must be cashflow written somewhere in the due diligence.