RXP - RXP Services Ltd

[Lizard]

Here's another relatively recent float that caught my eye in the quarterlies today. RXP is acquiring ICT consulting services and reporting growing cashflows.

It's possibly a little early for RXP (currently trading at 50.5cps), as most roll-ups seem to have at least one speed bump and plenty seem to fail due to overpaying for acquisitions. However probably all be clearer in 7 months time when the HY13 comes out.

Definitely seems like a space where consolidation might work. Have put it on the watchlist.

[Joshuatree]

Bought a few today. RXP have bought Transpire today and chances are goodearnings will be reported to the upside.

[steve fleming]

Bought a few today. RXP have bought Transpire today and chances are goodearnings will be reported to the upside.

I am in this now JT.

Trading on a FY14 EV/EBITDA of 6 x

CCZ Stanton have a target of 80c
Ord Minnettt have a target of 95c

Consensus FY13 EBITDA is $4.85m so under/outperformance of that is the key number to look for when they report.
(RXP have previously provided EBITDA guidance of ~A$4.5 million to ~A$6.0 million)

[steve fleming]

I am in this now JT.

Trading on a FY14 EV/EBITDA of 6 x

CCZ Stanton have a target of 80c
Ord Minnettt have a target of 95c

Consensus FY13 EBITDA is $4.85m so under/outperformance of that is the key number to look for when they report.
(RXP have previously provided EBITDA guidance of ~A$4.5 million to ~A$6.0 million)

Solid result (normalised EBIT of $5.15m) but great outlook statement.

"FY14 Revenue forecast to grow > 40%

Expect FY14 EBITDA margin to continue to grow"

That gives FY14 revenue of $42.2m @ (current) 20% margin = $8.5m

Current EV = $39m

So trading at 4.5x - looks way too cheap to me given growth profile.



EDIT: there is actually $5m of deferred consideration, so EV is actually $44m, so trading on 5x

[Snow Leopard]

I ran my eyes over them about two months ago, but I can not find my notes for it.

I was obviously not sold on the idea at the time and did not buy.

Best Wishes
Paper Tiger

[Joshuatree]

Cheers Steve.Looking forward to results. Completed my buying today.

[Joshuatree]

A "I told you so" prequel huh Thanks anyways for your thoughts.

[Lizard]

Yes, I picked up a few DWS hoping for a good result...

[steve fleming]

Another very strong (record) quarter with CF from operations of $1.3m. "Reflecting the on-going strength of the business"

Now, will the strong cash flows and balance sheet enable a maiden dividend to be declared?

[steve fleming]

Another very strong (record) quarter with CF from operations of $1.3m. "Reflecting the on-going strength of the business"

Now, will the strong cash flows and balance sheet enable a maiden dividend to be declared?

Hmmm, not very impressed with RXP's CFO's attention to detail. The 4C out today was dated 30 April 2013.

Hopefully he pays more attention when he is preparing his accounts.