Thank you for that analysis.
A few points of disagreement/clarification:
- Transaction value $20B in FY22, I see this as highly conservative, company has a target by FY22 of "$20b ++", We're already run-rating at $7.2b for June 2019, up from $3b for June 2018. Customer growth has been shown to be viral in AU in the first few years, and is looking that way in the US this leads to the continued exponential growth we've seen, I see $20b+ in FY21 as what can happen. Even just assuming steady state customer growth, 12.5k customers/day, sees us at 11.4m customers end of 2021 the midpoint of FY21, $1700 per customer yearly spend would get us to $20b and that's close to what we're seeing now.
- I don't know why you bother breaking out all the cost components when you could just use the target of 2% NTM, takes into account everything in your table up to and including bad debt cost. You are also erroneously applying provision balance as a proportion of receivables to equal bad debt as a proportion of TTV, that's not how it works. Refer to slide 54 of the presentation if you want detail here.
- I consider your salaries and operating expense to be too high. You can get a better idea of profitability if you look at the segment breakdown on pg 76 of the annual report. You might want to revisit slide 22-23 of the half yearly presentation which details the strategy around investment focus now, margin improvement later through operating leverage.
Regarding the share issues what you've got is roughly correct. The matrix convertible note can occur jan 2023 - jan 2025, does not give rights to the US business. It also entails a maximum of 21.8 share conversion, gets decided based on 10% of the proportion US business to APT business as a whole. If matrix convert to APT shares, then US ESOP option holders must also convert to standard APT shares. If matrix don't convert, then it's up to the board. See page 13 onwards from the
notice of the AGM last year.
It is reasonable to just say shareholders in APT today only own 80% of the US business, and 90% of the UK business.
You are wrong in saying the Australian business doesn't make money, again look at the segment report. Australian EBITDA $87m or $61m after you take out a portion based on revenue of the corporate costs.
I personally don't hold based on a conservative P/E applied on a near term profit, I hold based on how much of the market I see APT capturing over the next few years and continuing to capture past that. Refer to post #:
39278419 where I estimate a $100 SP. I assume a 1% profit margin unlike your 0.5% margin, and base topline off an estimate of country penetration rather than a fixed $20B figure. My country penetration estimate of 10% is starting to look conservative with ANZ sitting at 9.7% right now with 2.9m customers.
