P/E of 10 is good, but EBITDA of 10 is quite expensive. As a comparison, the takeover offer for Oakton valued the company at 11x EBITDA. This offer was 42.6% premium to their share price. So if you take out the 42.6% premium, you get the 7x EBITDA that Oakton was trading at before the takeover.
Granted that Oakton revenue is declining for quite some time. The whole IT consulting sector is very competitive and what you'll find these days is they don't have a lot of permanent staff in place. This is to keep the cost down. As soon as they signed up big projects, they start hiring contractors which chews into their profitability.
I know Readify really really well. They hire a lot of MVPs (Microsoft Valuable Professional) and use them to pitch to businesses that they are the best Microsoft consulting company in Australia. The problem with this business model is these MVPs doesn't come cheap. Their salary is roughly 10-20% higher than the normal consultant which again reduces profitability. Does it guarantee that the projects delivered by these MVPs are better than normal consultants? Not really.
They can't simply charge premium for their consultants because they need to compete with other IT consulting (e.g. Data #3, Dimension Data, SMS, OBS, etc). What matters in this business is their profit margin.
