TIL - Trilogy [formerly ECO - Ecoya]

[sb9]

Great spike this arvo, $4.46

Make that 450 vin, wonder what was the problem in the first instance. Feel sorry for those nervous nellies who sold out earlier in the week...

[boysy]

Yep not a great trade for those who bailed at 430. This share remains illiquid on both the way up and down so I expect the lumpy rises and falls will continue to occur for the foreseeable future.

[boysy]

Interesting update from The Motley Fool on Mcphersons (http://www.mcphersons.com.au/about-us) who distribute TIL in Australia. Looks like the market is excited over the growing business MCP will obtain via growing sales of TIL in aussie.

http://www.fool.com.au/2016/07/29/is...-2016-results/

In 2014, McPherson’s started distributing Trilogy branded “natural” skincare products on behalf of Trilogy International Ltd which is listed in New Zealand. Trilogy’s share price is up 397.8% in the last year and its NPAT jumped 108% in 2016 on the back surging sales of its Trilogy range.

Trilogy is the top selling “natural” skincare brand in New Zealand and revenue in Australia rose 45.8% to NZ$10.5 million in 2016 through the distribution agreement with McPherson’s. Trilogy has the potential to be a key earnings driver for McPherson’s in future years given the Australian “natural” skincare segment grew by 38% in the year to 13 December 2015.

[NZSilver]

Thanks for that post Boysy - interesting stuff

[IAK]

Base case
Rev 113
EBITDA 25
NPAT 16.6
EPS 24c

Bull case (still a relatively conservative bull case IMO)
Rev 118
EBITDA 28
NPAT 18.6
EPS 27c

Hey Muss1, if I use 72.1m shares issued (post SPP) I get;

Base case
Rev 113
EBITDA 25
NPAT 16.6
Shares issued 72.1m
EPS =23c

It's all looking good but I like Noodles' EV/EBITDA approach.....

There is a market darling stock on the ASX called BWX. They have an almost identical business to TIL except they are not organic.

BWX are trading on a FY17 EV/EBITDA=16.6
TIL are trading on a FY17 EV/EBITDA=11.8 (using Analyst forecasts)

If TIL attracts the same multiple as BMX, they will be trading at $5.64

This is the main reason I think today's announcement is brilliant.

Once listed on the ASX, I can't see why TIL will trade significantly less than BWX (currently trading at $Aus 5.59)?

[boysy]

And bwx have more shares on issue circa 91m vs TIL 72m

[IAK]

And bwx have more shares on issue circa 91m vs TIL 72m

Exactly.

Disc. Holding and user of Trilogy products

[muss1]

Hey Muss1, if I use 72.1m shares issued (post SPP) I get;

Base case
Rev 113
EBITDA 25
NPAT 16.6
Shares issued 72.1m
EPS =23c

It's all looking good but I like Noodles' EV/EBITDA approach.....




Once listed on the ASX, I can't see why TIL will trade significantly less than BWX (currently trading at $Aus 5.59)?

Yes you are right. I forgot I had done something a bit different with my model. Rather than building it into my calculations (due to unknowns etc) I have added 1.5cps for the synergy from CS Co taking over the trilogy distribution contract. I've come up with this using the EBITDA the contract was worth to the previous distributor.

So Really the numbers I quoted for rev and EBITDA are probably closer to boysys

[winner69]

I'm more bullish than boysey

I reckon npat f17 will be $18.9m - eps $0.262

Remember they said some of capital raised to pay off debt - lower interest cost

[boysy]

Would be great to get a trading update but this may have to wait until the AGM In September. I think muss1 and winner69 are correct re the respective synergy from CS distribution rights and lower interest cost. You going to update that valuation winner69 ?