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Keep in mind that 35% growth is much easier from a small base....

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jord@n

737 Posts.

61

25/09/18

20:30

Post #: 35836826
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Originally posted by elzephyrus ↑

According to the last webinar, one of the paths to cashflow break even (by end of CY19) is to grow by slightly under 40% per quarter for the next 6 quarters. If they can achieve 35% growth per quarter for the next 6 quarters they will earn $4.6m in that final quarter. Expenses for this current quarter are expected to be $4.2m, so that sounds about right..

Now, we know it's an annuity type business, so lets just assume for a moment that they do grow by 35% per quarter (not sure it's a reasonable target or not - just going by the webinar), and extend that out to 8 quarters.. So, in the 8th quarter, BUD would be producing revenues of approx $8.4m & because expenses should be fairly flat (let's say $4.6m), would be producing cashflow of approx $3.8m. Multiply that by 4 & we get annualised cashflow (not accounting for tax) of $15.2m & growing.. Even if we assume the full tax rate, NPAT should be over $10m (and growing)..

So, if (and that's a big if) BUD can kick the goals they have set for themselves, the forward valuation 2 years from now could be in the range of $300-500m..

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Keep in mind that 35% growth is much easier from a small base. I'm fairly confident in 35% growth at these levels, but maintaining that growth rate will be no easy task.

BUD Price at posting: 11.0¢ Sentiment: Hold Disclosure: Not Held
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