$SHVA.TA Problems in Paradise - Part II. Q1 Report quietly slipped to the market after the weekend market close - a never promising sign. As said earlier, this very special business is facing some significant issues for investors.
https://twitter.com/pbcinc/status/1514233613692411914?s=20&t=2RKYsT3ShkjMuqnByLFhNA
The 18.7% growth in Card transactions and 6% in ATM were strong as Israel shakes off the Covid related restrictions but only resulted in 5.5% Revenue growth as the big contribution of terminals Revenues is now past us.
The main difficulty ahead for the new management team is finding where growth should come from. Investors misjudged management's reluctance to adjust rates even to inflation or the time and cost it would take them. They will eventually get there. who knows when.
As $SHVA.TA is gearing to separate from #MASAB, the company needs to increase its expense, and no doubt will seek to rationalize costs. Expenses are introduced in a staggered manner, but still outgrew the Revenue growth (6.4% vs 5.5%), resulting in a 1.6% operating profit growth
The Cash pile is slowly growing but to my taste should not be considered as a catalyst, because management does not even think about any special div beyond the Div policy. Investors might as well consider it PP&E for valuation/capital allocation skills purposes (M&A coming?).
What we end with (even post 30% drop from April) is a MC of ~720 m NIS, delivering about 50 Pretax Op profit, ~15X for a slow - v slow grower in transition, Qs about the full Separation Costs, capital allocation skill/interest/desire and regrettable lack of an Owner operator.
I think investors would either need a (much) better valuation or signs management found a way to spur generate shareholders' value.
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