TSK - TASK Group Holdings

[Leftfield]

I hope you are right.

PLX has already rewarded me v well so I'm not overly worried about NZSA's concerns.... IMO Investment is all about having faith in management and Board to carry out BAU and sleeping well at night!

That said as added insurance, I intend to write to PLX seeking a response re NZSA's concerns.

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Pleased to say I've had a quick response from PLX.

Agree. They will do a book build first with the major institutions who will offer it to their clients and we will fight over the rest and be scaled back.

I want existing shareholders to get first pick without being scaled!

I think they should do what IKE did recently, offer a portion to Instos aka big boys and announce a rights offer to existing shareholders, that way retail holders need not fight on over crumbs.

Here's PLX's response FYI

"In terms of the reason why we are seeking capital – it is to grow the company. We have been very clear that for the last 3 years we have been focused on existing customers and being cashflow positive. However the market is growing and for us to participate in a meaningful way we need to grow as well and this is what the capital will be used for. In terms of getting it from Australia – we have talked with various sources (including NZ & the US) and have settled on Australia for a number of reasons (these will be explained in fuller detail by our Chairman).

Note that if we do go ahead there will be a priority pool for NZ investors."

So rest easy PLX holders, it seems we will fare well in any transition to ASX. As I said above..."Investment is all about having faith in management and Board to carry out BAU and sleeping well at night!"

[Hello123]

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Here's PLX's response FYI

"In terms of the reason why we are seeking capital – it is to grow the company. We have been very clear that for the last 3 years we have been focused on existing customers and being cashflow positive. However the market is growing and for us to participate in a meaningful way we need to grow as well and this is what the capital will be used for. In terms of getting it from Australia – we have talked with various sources (including NZ & the US) and have settled on Australia for a number of reasons (these will be explained in fuller detail by our Chairman).

Note that if we do go ahead there will be a priority pool for NZ investors."

So rest easy PLX holders, it seems we will fare well in any transition to ASX. As I said above..."Investment is all about having faith in management and Board to carry out BAU and sleeping well at night!"

This is great looking forward to the AGM, it takes 19 weeks to get listed on the asx i wonder if they have started already!

[CanadianAussie]

In response to:

"Usually a dual listing ASX and NZX is beneficial for holders, however I suggest you read post 3862 above and ask yourself why is PLX wanting to allow the sale of $50 mill in 'new' shares and whether these additional shares would dilute the value of your existing shares?? As NZSA says...

"We believe on the face of the limited information a better option would be to keep the primary listing on NZX, and take a compliance listing on ASX and, if needed, raise additional capital from existing loyal shareholders."


Firstly, they want to raise $50M for growth. They've brought on 2 board members recently with M&A experience and have been vocal about this. They're looking at acquiring a company and need $. Why anyone would be opposed to this with managements phenomenal track record of capital management is beyond me.

Secondly, the NZSA should be ashamed of themselves. This company will double or triple in value when the ASX gets whiff of it. As an ASX investor I'm so high on it I opened up an international account to buy before waiting for the ASX float. The NZSA wonders why they can't raise money on the NZX? Because raising $50M at a share price of $1.40 results in 35M more shares. Compare that to listing it on the ASX which will value it higher (I'll explain this below). Let's say conservatively the ASX values it double at $2.80. Raising $50M at this price results in 18M shares and HALF THE AMOUNT OF DILUTION. I'd question the NZSAs motives and who's best interests they have in mind.

Also I don't know what the NZSA is whingeing about, management has stated they'd give existing shareholders a chance to participate in the capital raise.

Why do I believe it will rerate at least double on the ASX? Because I've looked at over 250 micro and small cap ASX stocks and they're absolute trash compared to this company. The ASX will eat this company up. We have nothing like it; it's a bloody unicorn. To have a company 45% revenue growth 3 years in a row, profitable the last 2 (ignoring the issue of convertible notes), cash flow positive the last 3 (again convertible notes ignored) and have gross margins of over 75% is unheard of on the ASX at this price. Has anyone done a DCF on PLX? I have, it's crazy how much the NZX undervalues it.

Unless you like getting diluted more and making less money please, please, please don't vote against an ASX float.

[zs_cecil]

Could it be more likely a potential acquisition out there? Perhaps the target is an Australian company?

The explanation from the company on the ASX listing is still not very convincing to me unless there is a potential acquisition.
In terms of future growth, here are the scenarios I can think of:

1. Rollout to more McDonald stores in the world - I would worry if PLX ask for more money from the market to support this.
2. Hugh usage growth from Superindo - If the superindo deal is based on active usage, then we should see more cash inflow. it shouldn't need that much extra money.
3. A big big contract will be announced - Who knows....
4. Acquisition - The possibility is mentioned in the FY20 report.

[Leftfield]

Good first Post CanadianAussie.... welcome to the forum.

[Getty]

Welcome aboard Canadian Aussie, I love your enthusiasm, and I hope its equaled by your skill.

Re; has anyone done a DCF value, Shareclarity have, 12/8/20, and its only 53c vs current SP $1.41.

You infer DCF is way above that, so would you mind providing some substance?

Dr JPG

Tree SURGEONS have gone out on a LIMB.

[Brain]

I think a DCF on Plexure is only as good as the guesses and assumptions. For me I wouldn’t waste my time. Garbage in garbage out comes to mind. Investing or speculating on Plexure all amounts to believing in the product and management and whether or not the growth rate can be maintained. I have done well so far but I am very cautious about the future.

[forest]

[QUOTE=CanadianAussie;839770]In response to:
Also I don't know what the NZSA is whingeing about, management has stated they'd give existing shareholders a chance to participate in the capital raise.

Just to remind you that the present owners of PLX have all the right to have an opinion.
And I suspect that the thinking is not that they just like to participate, they more than happy to fork out the full amount for any foreseeable capital raise. That keeps the dilution to a minimum you see and give present shareholders the largest share of future profits.
Sorry NZSA members are a bit greedy.

[sb9]

In response to:

"Usually a dual listing ASX and NZX is beneficial for holders, however I suggest you read post 3862 above and ask yourself why is PLX wanting to allow the sale of $50 mill in 'new' shares and whether these additional shares would dilute the value of your existing shares?? As NZSA says...

"We believe on the face of the limited information a better option would be to keep the primary listing on NZX, and take a compliance listing on ASX and, if needed, raise additional capital from existing loyal shareholders."


Firstly, they want to raise $50M for growth. They've brought on 2 board members recently with M&A experience and have been vocal about this. They're looking at acquiring a company and need $. Why anyone would be opposed to this with managements phenomenal track record of capital management is beyond me.

Secondly, the NZSA should be ashamed of themselves. This company will double or triple in value when the ASX gets whiff of it. As an ASX investor I'm so high on it I opened up an international account to buy before waiting for the ASX float. The NZSA wonders why they can't raise money on the NZX? Because raising $50M at a share price of $1.40 results in 35M more shares. Compare that to listing it on the ASX which will value it higher (I'll explain this below). Let's say conservatively the ASX values it double at $2.80. Raising $50M at this price results in 18M shares and HALF THE AMOUNT OF DILUTION. I'd question the NZSAs motives and who's best interests they have in mind.

Also I don't know what the NZSA is whingeing about, management has stated they'd give existing shareholders a chance to participate in the capital raise.

Why do I believe it will rerate at least double on the ASX? Because I've looked at over 250 micro and small cap ASX stocks and they're absolute trash compared to this company. The ASX will eat this company up. We have nothing like it; it's a bloody unicorn. To have a company 45% revenue growth 3 years in a row, profitable the last 2 (ignoring the issue of convertible notes), cash flow positive the last 3 (again convertible notes ignored) and have gross margins of over 75% is unheard of on the ASX at this price. Has anyone done a DCF on PLX? I have, it's crazy how much the NZX undervalues it.

Unless you like getting diluted more and making less money please, please, please don't vote against an ASX float.

Wow, what a bomb of debut post on ST. Very bullish prediction on PLX prospects, makes an interesting ASM to look forward to on Thu 3rd Sep.

[CanadianAussie]

zs_cecil - Management doens't need $50M to roll out to more McDonald's stores - PLX is profitable. They've stated this is to pursue growth/acquisitions. As for your point about SuperIndo if you wait for the cash to flow in it could be 10years before PLX has their software in all of Ahold Delhaize's (they "own" SuperIndo) supermarkets. Moving faster blocks competitors from entering the market.

Brain - I completely agree; however, some form of valuation has to be done. I've done both a DCF and a comparables and they both look great.

forest - I think you need to re-read my comment. You can have your cake and eat it too but only if PLX lists on the ASX. You're assuming NZ holders don't get to participate in the SPP/float. My understanding is management has said they will. My opinion is that if it lists on the ASX it will re-rate much higher than it's currently trading meaning LESS shares will be issued, resulting in LESS dilution. Again, I've looked at over 250 ASX small and micro caps and I have never seen a company with such a strong history of positively trending cashflow, revenue growth, ROIC, ROE, profit etc etc - I don't see them because they don't stay small caps on the ASX. Dalziel and Herbison have really turned this company around since the departure of Scott Bradley.

forest, if you're worried about a capital raise I suggest looking into ASX:NVX. They needed to raise $58.28M so they did a prorata 1:1 entitlement offer at $0.29 on May 29th. The share price at the time was $0.435. Keep in mind this was an ENTITLEMENT offer not a SPP (there's a big difference). I can't comment on how PLX is going to structure theirs; however, it would not surprise me if it's not a similar format given they have a specific $ they are aiming to raise.

Getty - With regards to my DCF see below. I'm no expert in DCFs so please take with a grain of salt; however, these are in line with my ASX comparables valuation. $4.38 is based on a 45% revenue growth over the next 5 years and is post raising $50M (ie post dilution). Base case (25% growth) is $2.02, Bull case (55% growth) is $6.08.

I'm going to stop commenting as I don't want to give the impression I'm ramping. But please don't follow along the NZSA without coming to your own conclusion based on the facts.

Assumptions
Tax Rate		27.5%
Discount Rate		12%
Perpetual Growth Rate		4%
EV/EBITDA Mulltiple		8.0x
Transaction Date		22/08/2020
Fiscal Year End		31/03/2021
Current Price		1.41
Shares Outstanding		140,380,000
Capital raised from ASX IPO		50,000,000
Investment Bank IPO Fee		2.00%
Shares issued for ASX IPO		35460992.91
Shares Outstanding Post IPO		175,840,993
Discounted Cash Flow			Entry	2020	2021	2022	2023	2024	2025	Exit		Terminal Value
Date			22/08/2020	31/03/2021	31/03/2022	31/03/2023	31/03/2024	31/03/2025	31/03/2026	31/03/2026		EV/EBITDA		996,158
Time periods				1	2	3	4	5	6			Perp. Growth		1,143,655
Year frac				0.61	1.00	1.00	1.00	1.00	1.00	1.00		Average		1,069,906
EBIT				4,643	25,785	37,837	55,435	81,233	118,949
Less: Cash Taxes				1277	7091	10405	15244	22339	32711
NOPAT				3,366	18,694	27,432	40,190	58,894	86,238
Plus: D&A				930	1,249	1,998	2,936	4,107	5,571
EBITDA				5,573	27,034	39,835	58,370	85,340	124,520
Less: Capex				1,000	1,000	1,000	1,000	1,000	1,000
Less: Changes in NWC				5,444	(11,932)	930	1,349	1,955	2,835
Unlevered FCFF				(2,148)	30,875	27,500	40,777	60,046	87,973	1,069,906
Transaction FCFF			0	(1,307)	30,875	27,500	40,777	60,046	87,973	1,069,906
IRR FCFF			(197,922,219)	(1,307)	30,875	27,500	40,777	60,046	87,973	1,069,906
Intrinsic Value				Market Value				Rate of Return
Enterprise Value		720,948,122		Market Cap		197935800		Current Price		$1.41
Plus: Cash		13,581		Plus: Debt		0		Target Price		$5.14
Less: Debt		0		Less: Cash		13,581		TP Upside		264.24%
Equity Value		720,961,703		Enterprise Value		197,922,219		IRR		-51%
Equity Value/Share		$5.14		Equity Value/Share		1.41
Post ASX IPO
Equity Value		769,961,703
Equity Value/Share		$4.38