I don't know how to do the DCF. There seems to be some very big...

I don't know how to do the DCF. There seems to be some very big assumptions to make about future earnings etc. Have you done one? The result being, or with a screenshot of your assumptions too?

Cashflow positive in 6 months has crossed my mind too, and potentially being a takeover target. Cashflow positive seems easier to predict to me than DCF.

6 months is roughly my projected timeframe too, though that's based on the existing business, not ETF/advisor platform/international trading.



I was looking through some big competitors' annual reports. CMC Markets ($380m market cap, international operations, offering CFDs too) - The Australian stockbroking business had a year of significant growth, with net revenue up 81% to £15.5 million as a result of the implementation of the ANZ Bank white label partnership at the end of H1 2019. Client numbers in the core business increased 2% to 39,400 during the year and ANZ Bank active clients since go-live in July and September 2018 were 84,132 including intermediaries.

So ANZ decided to go with them for a whitelabel solution. It's not exactly a takeover, but it's suggesting that the big banks may be motivated to make moves, instead of sitting on their existing offerings. Then their 2% organic growth to 39,400 clients in Australia seems miserable compared to SWF's +194% growth, to 13,800 active clients (from 4694, Q4 on Q4).

Their £15.5m = $28m vs SWF's $2.8m. But including the ANZ partnership, and CFDs.


For their global operations:

Revenue per active client up £447 (18%) to £2,964 ($5404 AUD) and active clients down 917 (2%) to 59,165

Vs SWF's ARPU (average revenue per active trader, per year) of ~$270 (by my calculation).

So CMC's revenue per user is practically a different ball game. CFDs make 20x more money than stockbroking (and 80x more than interest) for them. So they make SWF look like a minnow, because of their CFDs.

I'm guessing SWF won't be offering CFDs within the next 2 years, if ever (the next priorities are ETFs and international trading, and the timelines often seem to get pushed back), but they are working on some other revenue sources - ETFs. That could boost ARPU, if not directly through the website, at least indirectly by boosting revenue separately.


So SWF wins on growth rate.
CMC wins on ARPU.