From Foster Stockbroking: 1-Page Limited (1PG.ASX, A$1.70, Mkt...

From Foster Stockbroking:


1-Page Limited (1PG.ASX, A$1.70, Mkt cap A$278M) – Co takes away cash burn concerns, to be included in ASX300


**DESK COMMENTARY**


Clarification by 1PG on cash burn statement: Company meant to say ramp up operating cost, not cash burn

·  Following a sharp sell off on Wednesday and Thursday this week (-/-30% in two days) on the back of confusion around forecasted cash burn, 1PG provided clarification around its investor presentation published on Tuesday the 8th.

·  In this presentation, the company talked about ramping up its monthly cash burn from US$1.3M to US$2M. The market interpreted this as highly negative as it assumed this cash burn included revenues, as it typically does.

·  However, as 1PG now clarified, the company intended to say it will be increasing its cost base to US$2M, i.e. excluding any revenues.

·  This implies the break-even level will amount to US$24M once fully ramped, which puts 1PG on track to reach cash break even towards the end of FY17 (ending January 2017) as we had been assuming previously.

·  Given it’s A$48.9M cash position per the end of January, we believe 1PG is comfortably placed to reach cash break even.



1PG added to the ASX300 index which will generate buying interest

·  Apart from clarification around its cost base, 1PG will be included in the ASX300 as of March 19. We believe this will be positive catalyst for the shares as it will put the company on the radar screen of a broader group of investors.

·  We reiterate our Buy rating for 1PG and our A$ 6.15 price target. The current A$278M market cap is very modest seen in light of 1PG’s potential in the US$300BN recruitment market in the US.