1/ New holding: Cast SA ( $cas.pa ). CAST is leader in software intelligence. Their software products represent what MRI does in healthcare. It gives visibility into code architecture, flaws, system health, cloud readiness etc. Over $160M R&D has been invested in their products.
2/ They did 33.2M € in revenue and 5.4M € in EBITDA in 2014 when they made a plan to accelerate their growth by investing heavily in their workforce and R&D, introducing a SaaS approach and indirect sales through partners.
3/ At the same time they took on board two new shareholders in CM-CIC and DevFactory (Joe Liemandt). Read more about Joe Liemandt in this Q1 2017 @greenhavenroad letter: static1.squarespace.com/static/5498841…. They bought more shares in a placing in 2018 at € 3,80 per share.
4/ Unfortunately acceleration of growth takes longer than expected, but I think we ware now close to the tipping point. After some heavy investment years with operating losses they are (again) guiding to profitability in 2020, 20% growth in 2021-2023 and sharp increase in margin.
5/Their SaaS Highlight product grew 90% to 2.37M € in 2019, 80% in H1 2020 and I think they are on track for 100% growth for FY 2020.
6/ I expect a decent part of the growth in revenue to fall straight to the bottom line. If we go with management guidance 2023 revenue would be about €75M. A conservative 15% EBIT margin gets you to €11M+ in EBIT in 2023. Shares are currently trading for 1x EV/ltm sales (€40M)
7/ For me it's hard to think of scenario's where you lose money here and a lot of reasonable scenario's where you make 5+ times your money. We have DevFactory on the board with a 28% stake and an incentivized 10% founder/CEO.
8/ If DevFactory decides it wants to acquire the company I don't think they will be able to pull it off with a lowball offer. The shareholder base is very balanced with investors CM-CIC and Long Path Partners owning 30% in total. Free float is only 7%, so only suitable for retail

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Ace Global Value

Ace Global Value Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @aceglobalvalue

29 Oct 19
1) In this thread I will present to you the case for Boustead Projects (BP) $AVM.SI with a catalyst right around the corner. Short term potential upside: 131%


BP is a real estate solutions provider listed in Singapore. The company is 53% owned by Boustead Singapore.
2) The company has two divisions. The design-and-build division provides technical consulting services and design-and-build expertise for business park and high-tech industrial developments in Singapore.
3) The average profit before income tax of this segment in the last 5 years was S$18.2M. It’s an asset-light business, they use subcontractors to carry out construction and thus earn high returns on equity. Backlog is record high, it stood at S$621M as of June 30th 2019.
Read 10 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!