Thoughts on the Five year outlook, page-13

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Veritas2000

12,555 Posts.

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23/01/22

13:06

Post #: 59070208
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Originally posted by Apotheosis: ↑

What are people's thoughts on these cashflow figures?

Key asssumptions, worst case scenario:
6.0% margin after FY2022 - historically 7.0%
2.8% lost / bad debts - most recent FY2022Q2 update had 2.8% - historically closer to 2%)
5.0% interest rate on borrowings (that is 2.2% higher interest rates than FY2021, say 9 rate rises this year)
TTV and Receiveables scale at similar rates in FY2022 and FY2023, then decay as expansion markets mature
SOI increases on avg 5% a year, adding 160m shares in 4 years, because why not
No other major acquisitions or structural changes
Share based employee benefits continue at similar CASH level and increase with headcount, at around $250m/year
No adjustment for additional revenue streams or new markets such as Zip Business
Banking fees remain the same
No major change in admin / depreciation / taxation witchcraft etc

Couple of years of the same, profit in FY2025, then explosive returns with further scaling. Net debt reducing in a few years. Kind of like your spec miner applying for a new mining licence, not so bad.

Now for another scenario: as above but
6.9% margin through FY2022 and following, similar to historical averages, and possible with the right customer base, partnerships / market positions
2.2% lost / bad debts, closer in line with historical averages
4% interest rate on borrowings over next 4 years, still 1.2% above FY2021

In this best case scenario:
Profitable in FY2024
In five years, no net debt and ~$60 price target

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May I commend you on a brilliant first post, despite having been a member for some years.

I always appreciate a poster who puts some thought into to post and I truly hope the investment works out for you.

My only non-positive comment would be, and please so not take this personally, is the exponential growth in revenues - I assume such is based on the inclusion of revenue from acquisitions as well as internal growth. To me that is the major unknown in the whole scenario.

Also. one has to be aware that during that time period there may well be another product launched which supercedes the BNPL product as it exits now.

Again, congratulations on this post.

V
Z1P Price at posting: $3.33 Sentiment: None Disclosure: Not Held
13 Upvote

0 Great analysis

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