BUY SHARE PRICE CASH EARNINGS ($M) COMPANY DATA & RATIOS

Transcription

1 BUY SHARE PRICE CASH EARNINGS ($M) COMPANY DATA & RATIOS

2 CONTENTS Competitors Products Sales channels Pricing Model

3 INVESTMENT THESIS

4 COMPANY OVERVIEW

5 INDUSTRY OVERVIEW

6 COMPETITORS BOARD AND MANAGEMENT

7

8 BUSINESS MODEL PRODUCTS

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10

11 SALES CHANNELS PRICING MODEL

12 FINANCIAL FORECAST

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14 BOEQ Cash Basis Assumptions (A$) 1H16 2H16 FY16 1H17 2H17 FY17 1H18 2H18 FY18 New Customers Renewing Customers Total Customers Added in Period Average annual revenue per customer ($) NMF 12,000 12,000 30,000 30,000 30,000 33,000 33,000 33,000 Assumed % of Annual Upfront Payment 100% 100% 100% 100% 100% 100% 100% 100% Cash Revenue 201, , ,705 1,380,000 2,955,000 4,335,000 5,174,400 6,560,400 11,734,800 Operating Costs 2,786,536 2,250,000 5,036,536 2,700,000 2,700,000 5,400,000 3,000,000 3,000,000 6,000,000 Cash EBITDA (2,584,831) (1,996,000) (4,580,831) (1,320,000) 255,000 (1,065,000) 2,174,400 3,560,400 5,734,800 $10 $8 $6 $4 $2 $- 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Cash Balance Revenue Expenses

15 BOEQ Accounting Basis Assumptions (A$) 1H16 2H16 FY16 1H17 2H17 FY17 1H18 2H18 FY18 Customers at start of period Net Customers Added during the period Total Customers at the end of the period Average customers over the period Total Revenue for the period $ 157,566 $ 232,000 $ 389,566 $ 610,000 $ 1,681,250 $ 2,291,250 $ 3,551,350 $ 5,258,275 $ 8,809,625 Average Monthly Revenue Per Customer $ 2,764 $ 1,121 $ 1,299 $ 1,495 $ 2,380 $ 1,914 $ 2,889 $ 2,823 $ 2,878 Annualised Total Revenue run rate at period end $ 600,000 $ 600,000 $ 1,950,000 $ 4,485,000 $ 4,485,000 $ 8,589,900 $ 11,899,800 $ 11,899,800 Monthly Cost base $ 464,423 $ 383,333 $ 423,878 $ 450,000 $ 450,000 $ 450,000 $ 500,000 $ 500,000 $ 500,000 Total Cost base over period $ 2,786,536 $ 2,300,000 $ 5,086,536 $ 2,700,000 $ 2,700,000 $ 5,400,000 $ 3,000,000 $ 3,000,000 $ 6,000,000 Reported EBITDA $ (2,584,831) $ (2,068,000) $ (4,652,831) $ (2,090,000) $ (1,018,750) $ (3,108,750) $ 551,350 $ 2,258,275 $ 2,809,625 BOEQ Forecast (A$M) 1H16 2H16 FY16F 1H17 2H17 FY17F 1H18 2H18 FY18F 1H19 2H19 FY19F 1H20 2H20 FY20F Revenue Growth rate 287% 562% 403% 482% 213% 284% 116% 83% 96% 71% 59% 64% EBITDA Growth rate -21% -49% -33% -126% -322% -190% 690% 181% 281% 118% 85% 98% EBIT Growth rate 16% 42% 28% -106% -233% -152% 2674% 217% 390% 131% 90% 106% NPAT Total NPAT Growth -10% 42% 28% -107% -240% -155% 2214% 170% 339% 63% 58% 60% Total Customers at Period End Total Annualised Revenue Run Rate Net Operating Cash Flow Cash Balance at Period End

16 VALUATION AND RECOMMENDATION

17 KEY RISKS

18 SUMMARY FINANCIALS Stock Details Recommendation BUY 52 Week High $1.97 Shares on Issue 106.4m Valuation $ Week Low $0.11 Market Capitalisation $11.7m Share price $0.11 Avg Mthly Value $0m Enterprise Value $7.3m Upside/downside 256% Financial Year End 30-June Free Float 50% Profit & Loss ($m) FY16F FY17F FY18F FY19F FY20F Ratio Analysis FY16F FY17F FY18F FY19F FY20F Operating Revenue Revenue Growth % 409.7% 284.5% 96.4% 64.4% Other Revenue EBITDA Growth 601.5% 33.0% 190.4% 281.0% 98.5% Total Revenue EBIT Growth 833.7% 27.8% 151.7% 389.9% 106.3% Operating Costs NPAT Growth % 28.3% 154.8% 339.1% 60.4% EBITDA D&A EBITDA Margin % % 31.9% 61.9% 74.7% EBIT EBIT Margin % % 23.0% 57.4% 72.0% Net Interest Expense Tax Rate 0.0% 0.0% 0.0% 8.8% 29.3% Pre-Tax Profit NPAT Margin % % 23.9% 53.5% 52.2% Tax Expense Minority Interests Basic EPS ( ) NPAT Reported Diluted EPS ( ) One-Offs after tax Diluted EPS growth 1996% -28% -155% 339% 60% NPAT Normalised DPS ( ) Balance Sheet ($m) FY16F FY17F FY18F FY19F FY20F DPS Growth 0.0% 0.0% 0.0% 0.0% 0.0% Cash Franking Inventory Payout Ratio Receivables Other ROE -68% -96% 34% 60% 49% Current Assets ROA (NPAT) -47% -42% 14% 32% 31% PPE ROIC -65% -86% 32% 58% 48% Intangible Assets Other Total Debt Non-Current Assets Net Debt (Cash) Total Assets Current Debt / Total Debt 0% 0% 0% 0% 0% Net Debt / Equity 0% 0% 0% 0% 0% Payables Net Debt/Net Debt + Equity 0% 0% 0% 0% 0% Interest Bearing Liabs EBIT Interest Cover Other Total Debt / EBITDA Current Liabilities Interest Bearing Liabs Capex / Sales 30% 10% 5% 4% 3% Other Capex / Depreciation 50% -214% -206% -191% -177% Non-Current Liabilities Total Liabilties EBITDA Change in W/C Contributed Equity Net Interest Expense Reserves + Retained Tax Paid Option Reserve Cash Flow Deferred Consdieration Maintenance Capex Total Equity Free Cash Flow Cashflow Statement ($m) FY16F FY17F FY18F FY19F FY20F Valuation FY16F FY17F FY18F FY19F FY20F Gross Cash Flow Shares on Issue (Million) Net Interest Normalised EPS ( ) Tax Paid PE -2.2x -3.0x 5.5x 1.3x 0.8x Other CFPS ( ) Net Operating Cash Flows P/CFPS FCFPS Payments for PPE P/FCF Payments for Acquisitions Other DPS ( ) Net Investing Cash Flows Yield 0.0% 0.0% 0.0% 0.0% 0.0% Net Share Issues BVPS ($) Net Borrowings P/BV Dividends Paid NTAPS ($) Other P/NTA Net Financing Cash Flows EV/EBITDA -1.6x -2.3x 2.6x 0.7x 0.3x Change in Cash Held EV/EBIT -1.3x -1.9x 3.6x 0.7x 0.4x Cash at Beginning of Period Adjustments PE Ratio (Valuation) -7.8x -10.8x 19.8x 4.5x 2.8x Cash at End of Period EV/EBITDA (Valuation) -1.0x -1.0x 3.1x 2.0x 1.9x

19 ANALYST CONTACTS AUTHORITY CONTACTS HEAD OFFICE DISCLAIMER This document is a private communication to clients and is not intended for public circulation or for the use of any third party, without the prior approval of Blue Ocean Equities Pty Limited. This is general investment advice for Institutional and Sophisticated Investors only and does not constitute personal advice to any person. Because this document has been prepared without consideration of any specific client s financial situation, particular needs and investment objectives you should consult your own investment adviser before any investment decision is made on the basis of this document. While this document is based on information from sources which are considered reliable, Blue Ocean Equities Pty Limited has not verified independently the information contained in the document and Blue Ocean Equities Limited and its directors, employees and consultants do not represent, warrant or guarantee, expressly or by implication, that the information contained in this document is complete or accurate. Nor does Blue Ocean Equities Limited accept any responsibility for updating any advice, views opinions, or recommendations contained in this document or for correcting any error or omission which may become apparent after the document has been issued. Except insofar as liability under any statute cannot be excluded. Blue Ocean Equities Pty Limited and its directors, employees and consultants do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this document or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this document or any other person. DISCLOSURE Blue Ocean Equities Pty Limited, its employees, consultants and its associates within the meaning of Chapter 7 of the Corporations Law may receive commissions, underwriting and management fees from transactions involving securities referred to in this document, and may from time to time hold interests in the securities referred to in this document. Blue Ocean Equities Pty Limited and associates hold 1,283,571shares in RFN at the date of this report and this position may change at any time without notice.