Screaming Buy!

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6	Column 7	Column 8	Column 9
0		FY11	FY12	FY13	FY14	FY15	FY16	FY17F	FY18F
1	Revenue[/B]	95.6	110.5	120	137.3	148	173.2	199.2	229.1
2	Gross profit	36.8	45	49.3	68.3	71.6	76.3	89.6	103.1
3	EBITDA	15.6	17.7	17.5	16.5	12.4	16.1	19.9	22.9
4	Ratios
5	Revenue growth (%)	n/a	15.6%	8.6%	14.4%	7.8%	17.0%	15.0%	15.0%
6	EBITDA growth (%)	n/a	13.5%	-1.1%	-5.7%	-24.8%	29.8%	23.7%	15.0%
7	Gross margin (%)	38.5%	40.7%	41.1%	49.7%	48.4%	44.1%	45.0%	45.0%
8	EBITDA margin (%)	16.3%	16.0%	14.6%	12.0%	8.4%	9.3%	10.0%	10.0%
9	Valuation
10	Enterprise Value	n/a	n/a	$ 90.9m	$ 85.6m	$ 76.1m	$  131.6m	$  163.3m	$  187.8m
11	Market capitalisation	n/a	n/a	$ 89.2m	$ 74.4m	$ 59.5m	$  123.5m	$  158.3m	$  185.8m
12	Share price			$   0.30	$   0.25	$   0.20	$   0.42	$   0.53	$   0.62
13	EBITDA multiple			5.2x	5.2x	6.1x	8.2x	8.2x	8.2x

These multiples are quite low for a business that is growing revenue 12% annualised since FY11. Gross margin has remained relatively consistent highlighting the underlying strength of the business.

I have assumed the business continues to pay down debt in FY17 and FY18, increasing enterprise value.

As can be seen, assuming no material amount of new shares are issued a share price of $0.53 is achievable by 30 June 2017 assuming 15% revenue growth and consistent EBITDA margins of 10%.


This is a premium of 61% to the current share price of $0.33 (9/11/2016).


Scream with me, BUY BUY BUY BUY!