Good question. When Hambling and Kennan took over, it was a turnaround in the making (some would argue it's still a turnaround). The dilution was necessary. Both have relevant stakes in the company and are return-oriented. If there is to be further dilution, I expect it to be very accretive on an EPS basis.
The latest comments suggest that there will be no dilution, just refinancing and acquisitions out of cash flow.
Ah ok thanks. I heard the accretive part and not the no dilution part. Given the current stock price, it seems you aren't the only one expecting good things.
That is definitely an unknown. The CEO has already offered me a call and that's one of the questions I'm going to ask. In their older presentations they have stated that the average lifetime of business relationships is 7 years. However, due to the acquisitions and the changes in the proportion of business and private customers, this may have changed significantly.
Thank you please update us when you have info. It would help complete the picture. Commercial security is a big PE roll up target in the USA at the moment, very interesting space.
I asked him today why they can make the acquisitions at such low prices. He said it was not easy to make the acquisitions at these prices. People are not queuing up. In one case it was an older founder who wanted to retire and just wanted a fair price and for his employees to move to a company that has a good future.
Could make more acquisitions, but are very cautious about the prices they pay. Are perceived by some buyers as someone with business is in good hands.
- If you don't consider leasing as debt then the lease payments should be counted as opex not interest payments (all the acquisition multiples should also be adjusted either to include leasing debt in EV or (better) to substract the full lease payments from EBITDA)
- Irisity is a SaaS company (surveillance video analytics software) and thus not a relevant peer
I have only assumed the interest portion of the lease as interest. Both components, interest & amortisation on ROU assets, are included in my calculation of the P/E. $SECU.V also reports under IFRS, so there was no need for adjustment.
Thanks for the comment. I haven't looked into Irisity either, but $SECU.V does virtually the same thing as IMG.
Nice write up. Good to see foreign investors looking at ASX microcap stocks.
Thanks Mark, appreciate it.
Nice writeup. Any thoughts on the past and probable future dilution? It's above 30% per yr for the last few years.
Good question. When Hambling and Kennan took over, it was a turnaround in the making (some would argue it's still a turnaround). The dilution was necessary. Both have relevant stakes in the company and are return-oriented. If there is to be further dilution, I expect it to be very accretive on an EPS basis.
The latest comments suggest that there will be no dilution, just refinancing and acquisitions out of cash flow.
Ah ok thanks. I heard the accretive part and not the no dilution part. Given the current stock price, it seems you aren't the only one expecting good things.
Thanks for the nice write up. Any thoughts on churn rates or organic CAC? Seems this may contribute to the seemingly low multiples paid?
That is definitely an unknown. The CEO has already offered me a call and that's one of the questions I'm going to ask. In their older presentations they have stated that the average lifetime of business relationships is 7 years. However, due to the acquisitions and the changes in the proportion of business and private customers, this may have changed significantly.
Thank you please update us when you have info. It would help complete the picture. Commercial security is a big PE roll up target in the USA at the moment, very interesting space.
I asked him today why they can make the acquisitions at such low prices. He said it was not easy to make the acquisitions at these prices. People are not queuing up. In one case it was an older founder who wanted to retire and just wanted a fair price and for his employees to move to a company that has a good future.
Could make more acquisitions, but are very cautious about the prices they pay. Are perceived by some buyers as someone with business is in good hands.
thank you Christian. Any clarity on CAC numbers?
Sorry, I have to admit that I completely forgot to ask him that. I will write him an email.
No worries ! Thanks for following up!
- If you don't consider leasing as debt then the lease payments should be counted as opex not interest payments (all the acquisition multiples should also be adjusted either to include leasing debt in EV or (better) to substract the full lease payments from EBITDA)
- Irisity is a SaaS company (surveillance video analytics software) and thus not a relevant peer
I have only assumed the interest portion of the lease as interest. Both components, interest & amortisation on ROU assets, are included in my calculation of the P/E. $SECU.V also reports under IFRS, so there was no need for adjustment.
Thanks for the comment. I haven't looked into Irisity either, but $SECU.V does virtually the same thing as IMG.
"zero exercise price warrants were issued to Tor for 7.5% of the equity"
what is TOR? Was there any additional dillution after the article?
https://www.torinvestment.com/