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  1. #851
    Guru Rawz's Avatar
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    I see they raised $21.7m, just shy of the $22m they wanted...

    I totally missed that there was no retail offer, just assumed we could maintain our holdings and not get diluted. Retail investors always get the left in the dark.

    Some of the new shares went to "A number of highly credentialed institutional investors". Guess that's good for liquidly.

  2. #852
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    Quote Originally Posted by Rawz View Post
    I see they raised $21.7m, just shy of the $22m they wanted...

    I totally missed that there was no retail offer, just assumed we could maintain our holdings and not get diluted. Retail investors always get the left in the dark.

    Some of the new shares went to "A number of highly credentialed institutional investors". Guess that's good for liquidly.
    My thoughts too, surprised to see no retail entitlement offer. They probably couldn't be bothered with all the hassle of SPP and admin stuff associated with that.

    And moreover we're bit of nuisance and distraction to them in big scheme of things.

  3. #853
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    Article in yesterdays HB Today, how EVO had to shut its Lollipops child centre in Hastings, at short notice, disappointing parents.

    Apparently cant attract enough Qualified staff to maintain Govt ratios.

    Could be a problem elsewhere?

  4. #854
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    Its been very quite around here, big crossing today..

    121 1,500,000 11:36 SP

  5. #855
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    Quote Originally Posted by Balance View Post
    Industry is going through consolidation and whilst it would be really nice to get a sizeable acquisition for EVO to bulk up fast, I believe management prefers to add on bite size acquisitions whenever these become available.

    And ready cash in the bank tends to secure the best deals when players are exiting the industry and selling out.
    Word on the street is that some global providers are sniffing around NZ for large provider acquisitions. Wouldn't surprise me given what's going on across the ditch.

  6. #856
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    Not sure what's going on here, someone pushing price down to accumulate more or something else?

  7. #857
    Guru Rawz's Avatar
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    Are any other shareholders accumulating at these levels? I have been adding.

    EVO currently sitting on a historical P/E of 14. Based on a $10.09 NPAT having being annualized from the profit 9 months to 31/12/2020. Underlying EBITDA is $20.9m (annualized again).

    Underlying EBITDA is managements preferred method to measure the companies performance. It cuts out the noise.
    EVO's big potential for growth is 1) via acquisitions and 2) lifting the occupancy rate back to 80% which it was in 2017.

    Acquisitions seem to be the way to go. The current underlying EBITDA per centre is $166,137. The recently settled 5 centres (out of 10 to settle) will generate $720,000 per centre underlying EBITDA. That is 4x the underlying EBITDA the current centres are generating.. Wow! EVO head office costs will pull the $720k figure down I imagine, as it's cost is shared to the new centres. EVO said the remaining 5 centres would settle in May, which ended yesterday. There was no notice saying they settled so hopefully we get something early June confirming they settled.

    Cash on the balance sheet as at 31/12/2020 was $59,159,000. Less cost of 10 centres above being $27,130,000 add recent placement NZ$23,000,000 = $55,029,000 cash on hand minimum. The business is generating $34,000,000+ pa in operating cashflows.

    That $55m cash in the bank could potentially buy new underlying EBITDA of $13.75m. This is based on previous acquisitions costing 4x underlying EBITDA.

    Current occupancy rate is 69.5% with underlying EBITDA per centre of $166,137.
    2017 occupancy rate was 80.0% with underlying EBITDA per centre of $216,966.

    If EVO generated $216,966 per centre it would lift underlying EBITDA from $20.9m (31/12/2020) to $29.9m.
    If EVO could use the $55m in the bank to purchase new centres at 4x EBITDA it would add $13.75m.

    I see the POTENTIAL based on acquisitions + increased occupancy rates of underlying EBITDA growing from $20.9m to $43.65m ($29.9m + $13.75m). I.e. 108% increase.

    A lot of work to be done to get to the $43.65m figure above. Luckily the management team are A+++ and have a lot of skin in the game. Happy to back this horse.

  8. #858
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    Also note they are looking for ratification of the recent placement at the AGM, allowing them to do further large placements within a year of the previous. They clearly have further large acquisitions to be funded by placement on the radar.

    Some busy bees scouting around NZ too by all accounts...

  9. #859
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    Thanks for that, I've been holding on, whilst bleeding a little as the SP has moved down. Shall stay the course.

  10. #860
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    At first glance todays announcement is not encouraging.

    Even if the offer of future dividends.
    om mani peme hum

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