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Thread: KKT - Konekt

  1. #1
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    Default KKT - Konekt

    Odd little micro-cap this one. Seems to offer some specialised employee management services with a focus on health and risk management. Can't remember whether it was the subject of a ramp at one stage or just another tech-wreck victim that has taken a decade to get it together...

    Anyway, seems to be pulling itself together and latest result looks good with strong cash generation. On latest profit, fully diluted P/E is about 7.9 at 15cps. Paying a maiden (?) div of 0.5cps. EV/EBIT about 4.8. Nice ROE/ROIC figures, but perhaps they destroyed a lot of investment capital along the way?

    Hard to tell if it's just a case of one good year or beginning of a growth story, but might be worth a closer look one quiet day.

  2. #2
    percy
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    Quote Originally Posted by Lizard View Post
    Odd little micro-cap this one. Seems to offer some specialised employee management services with a focus on health and risk management. Can't remember whether it was the subject of a ramp at one stage or just another tech-wreck victim that has taken a decade to get it together...

    Anyway, seems to be pulling itself together and latest result looks good with strong cash generation. On latest profit, fully diluted P/E is about 7.9 at 15cps. Paying a maiden (?) div of 0.5cps. EV/EBIT about 4.8. Nice ROE/ROIC figures, but perhaps they destroyed a lot of investment capital along the way?

    Hard to tell if it's just a case of one good year or beginning of a growth story, but might be worth a closer look one quiet day.
    Looks a potential wee cracker.Debt repaid from cash flow..Looks as though they had a UK joint venture that did not work out.Look forward to your analysis once you have had a closer look.
    Last edited by percy; 12-08-2010 at 08:59 PM.

  3. #3
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    Hi Percy,

    I had a little more of a look at KKT. The June microequities presentation is well worth a read. They seem to have quite a high level of awareness of their shareholders and their share price performance - although that might just mean they are taking the opportunity to talk about it while the going is good and shareholders are relatively happy with them! However, although heading in the right direction, I don't see too much certainty for an improved profit in current year.

    Firstly, they will have to be tax normal in their reporting (though not cashflow), although I allowed for that in the P/E figure of 7.9 from my first post. More worryingly was the statement in the May presentation that the last quarter profitability was being impacted by "file portability in NSW as a result of the recent tender". So not only bad news, but bad use of jargon to soften the meaning. The degree of bad news is borne out by the "balanced scorecard" charts that show April as being particularly bad. On the other hand, they appear to have won a Queensland tender in July, so perhaps that will balance it out? The outlook statement in the FY result remains positive, albeit in a rather optimistic, broad-based way (i.e. we're aiming for organic growth, we're putting together some new product offerings, we might make some acquisitions). I'd be reluctant to read too much into it at this point and would prefer to wait until half year, where they will likely struggle to beat the strong pcp.

    As an aside, came across this interesting slide in their May presentation which is worth considering when looking at the profitable micro-caps and trying to create some sort of price benchmark for them:


  4. #4
    percy
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    Quote Originally Posted by Lizard View Post
    Hi Percy,

    I had a little more of a look at KKT. The June microequities presentation is well worth a read. They seem to have quite a high level of awareness of their shareholders and their share price performance - although that might just mean they are taking the opportunity to talk about it while the going is good and shareholders are relatively happy with them! However, although heading in the right direction, I don't see too much certainty for an improved profit in current year.

    Firstly, they will have to be tax normal in their reporting (though not cashflow), although I allowed for that in the P/E figure of 7.9 from my first post. More worryingly was the statement in the May presentation that the last quarter profitability was being impacted by "file portability in NSW as a result of the recent tender". So not only bad news, but bad use of jargon to soften the meaning. The degree of bad news is borne out by the "balanced scorecard" charts that show April as being particularly bad. On the other hand, they appear to have won a Queensland tender in July, so perhaps that will balance it out? The outlook statement in the FY result remains positive, albeit in a rather optimistic, broad-based way (i.e. we're aiming for organic growth, we're putting together some new product offerings, we might make some acquisitions). I'd be reluctant to read too much into it at this point and would prefer to wait until half year, where they will likely struggle to beat the strong pcp.

    As an aside, came across this interesting slide in their May presentation which is worth considering when looking at the profitable micro-caps and trying to create some sort of price benchmark for them:

    Thank you Lizard.
    I missed the scorecard.Does not add up to what they are saying.With 41% of revenue from NSW the scorecard implies they have lost a huge part of their business."file portability" is not a statement I trust.Very bad use of jargon as you rightly pointed out.Yes sage advice {as always} will wait for half year result.Again thank you for your analyst"s view.

  5. #5
    IMO
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    Picked some up in Aug @ 23c out today @ 32c. Have more growth ideas elsewhere atm; back on the watch list.

  6. #6
    percy
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    An absolutely stunning result.
    NPAT up 70% and we will get an0,05cent ps divie.!!!
    Outlook is also very positive.

  7. #7
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    Quote Originally Posted by percy View Post
    An absolutely stunning result.
    NPAT up 70% and we will get an0,05cent ps divie.!!!
    Outlook is also very positive.
    Even better they managed to slip a " well positioned " in there as well.

  8. #8
    percy
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    Quote Originally Posted by stoploss View Post
    Even better they managed to slip a " well positioned " in there as well.
    Just the confirmation we needed.!! lol.

  9. #9
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    Been watching awhile. re 13% drop today on contract change with large client.Unknown if any impact on rev atp.

  10. #10
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    Quote Originally Posted by Joshuatree View Post
    Been watching awhile. re 13% drop today on contract change with large client.Unknown if any impact on rev atp.
    Ouch.........
    DISC : Sold 50 % @ 56 cents.
    Last edited by stoploss; 06-01-2017 at 06:05 PM. Reason: add to post

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