Venture Advisory Monthly Wrap - July 2018

Updated: Jun 27, 2019

Monthly Markets Wrap and Company Updates - July 2018

Key Takeaways

In one of the biggest recent changes to the Australian media landscape, Nine and Fairfax Media are merging to create a single media company under the Nine brand. The deal comes off the back of the Australian media reforms, and will see Nine acquire not only Fairfax’s mastheads, but its digital assets in Domain and Stan and it radio interests in Macquarie Media

Telstra has begun executing its T22 strategy with an organizational and executive restructure, which will see several key personnel depart with new roles and new additions. Departures include CFO Warwick Bray, Stephen Elop, Will Irving, and Joe Pollard. New additions include recently departed SBS CEO Michael Ebeid who will run Enterprise, as well as other executives such as Nikos Katinakis

Despite security concerns raised by some Australian lawmakers, Huawei, the world’s largest telecom equipment vendor, has scored an A$136 million (US$101 million) contract to build and maintain the digital radio systems that deliver voice and data services across Perth’s rail network. The Chinese company will make and install the fourth generation (4G) communications system for Perth’s rail network by 2021 as part of a joint venture with Australian engineering company UG

Telco Monthly WrapTelco Best and Worst Monthly Performers

The 5 best and worst performers for the month of May 2018 were as follows:

Key Company Announcements

5G Networks Ltd. (31 July) announced an update for the quarter ended 30 June 2018 and an update on business progress. Cash receipts have increased by 54.0% on the previous quarter to $2.4 million, with operating cash flow at $114,000 for the quarter, signifying an improvement of $53,000. Following the acquisition of Asian Pacific Telecommunications (APTel) in March this year, the APTel business has now been fully integrated into 5G Networks, and synergies and efficiencies are being recognized across the various aspects of operations

amaysim Australia Limited (9 July) announced that the ACCC has commenced proceedings against an amaysim subsidiary, amaysim Energy Pty Ltd (previously Click Energy Pty Ltd and trading as Click Energy), in relation to statements about discounts and savings of its energy products that it considers to have contravened the false or misleading conduct provisions of the Australian Consumer Law. The company rejects the claims being made by the ACCC and believes it has acted lawfully, ethically and in accordance with industry practice

Chorus Limited (13 July) announced its Q’4 ended 30 June 2018 connections update. Broadband demand grew strongly in Chorus UFB areas, with reductions in total fixed line connections consistent with Q3. Total broadband connections grew by 3,000 and total fixed line connections declined by 17,000

Chorus Limited (3 July) announced its rating by Moody's Investors Services. The long term rating remains unchanged at Baa2 with a stable outlook

Hutchison Telecommunications (Australia) Limited (31 July) announced the Company’s results for the half year to 30 June 2018. Hutchison reported a statutory net loss of $10.3 million for the half-year ended 30 June 2018, representing a $0.3 million decline on the $10.0 million net loss in the corresponding period last year

Megaport Ltd. (26 July) announced its solid 4Q FY18 performance which reflected a solid growth trajectory off the back of new and expanded cloud, data centre, network, and sales channel partnerships. In comparison to the last quarter, the revenue for the period has increased by 12.0%, total monthly recurring revenue (MRR) has increased by 11.0%, customers has increased by 9.0% and the Company’s cash position was $56.3 million

MNF Group Limited (6 July) announced that it has completed the purchase of SuperInternet Group. MNF paid S$2.0 million (AU$2.0 million) for the SuperInternet Group, a fully licensed independent Facilities Based Operator (FBO) in Singapore

Netcomm Wireless Limited (18 July) announced the retirement of Peter Beveridge from the role of alternative Company Secretary from 2 July 2018 and the appointment of Clint Bell, Commercial and Legal Manager of NetComm, as the alternative Company Secretary from this date. Chris Last, Chief Financial Officer will act as the primary Company Secretary for NetComm

NextDC Limited (6 July) announced completion of Notes IV at $300 million. Notes IV consists of a floating rate tranche of $200 million at 3.8% over 3-month BBSW and a fixed rate tranche of $100 million at 6.0%

NextDC Limited (3 July) announced the formal launch of the marketing and pricing of a new senior unsecured notes offering. Notes IV is a complementary security to the $300 million raised by the Company in May 2017 (“Notes III”), with a similar structure, albeit a different maturity date (June 2022), compared to June 2021 for Notes III. The Company is aiming to raise $250 million, with an ability to take over-subscriptions. NEXTDC intends to use the net proceeds from the issue of the Notes IV for general business and financing purposes, including investment in the development of new data centre sites and the core supporting infrastructure at these sites, as well as to assist financing potential acquisitions currently under consideration

Singapore Telecommunications Limited (25 July) announced that Singtel and Ericsson will launch by the fourth quarter of this year Singapore's first 5G pilot network at one-north, the country's science, business and IT hub

Singapore Telecommunications Limited (19 July) announced that Group’s CFO Lim Cheng Cheng has been named Best CFO for listed companies with a market capitalisation of S$1.0 billion and above at the Singapore Corporate Awards 2018

Singapore Telecommunications Limited (10 July) announced that it will kick off its eSports initiative with the launch of PVP eSports Championship, a multi-title and regional league with a prize pool of US$300,000. This is part of the Group's efforts to grow its gaming and digital content business across its footprint in the Asia Pacific region

Spark New Zealand Limited (10 July) announced that it has completed the first major milestone in its transition from the Public Switched Telephone Network (PSTN) to the IP-based voice network dubbed the ‘Converged Communications Network’ (CCN). As part of this first phase, Spark has switched on a new IP Multimedia Subsystem provided by Ericsson which will deliver a better-quality calling experience

Spark New Zealand Limited (9 July) The New Zealand Commerce Commission has notified Spark New Zealand that it intends to file court proceedings against Spark under the Fair Trading Act 1986 in relation to three separate historical operational and billing issues: 1. An equipment fault in 2015 that affected data billing for a small percentage of customers, 2. Incorrect implementation of a ‘welcome credit’ when joining Spark for some fibre broadband customers during 2016, 3. A billing implementation issue relating to a 30-day notice period when customers left Spark

Spark New Zealand Limited (2 July) announced the appointment of Matt Bain as Marketing Director effective from November 2018 and the promotion of Melissa Anastasiou, Spark’s General Counsel, as the Leadership Squad with immediate effect

Spirit Telecom Ltd. (26 July) announced quarter update ended 30 June 2018 and FY18 financial summary. FY18 unaudited results revenue grew by 41.0% to $16.1 million and gross margin grew by 54.0% to $11.1 million and underlying EBITDA grew by 47.0% to $2.9 million - $3.0 million

Superloop Ltd. (2 July) announced the following updates:

Drew Kelton commenced as Superloop’s Chief Executive Officer. Superloop’s Founder and former Chief Executive Officer, Bevan Slattery, will continue as an Executive Director to focus on strategic priorities and to lead the Company’s innovative approach to technology and systems

Cable system manufacturing and factory testing is complete for both INDIGO West and INDIGO Central. Both marine operations are expected to complete in December 2018 however prior to this, cable landing events are expected to occur in Perth, Sydney and Singapore from September 2018

Completed an agreement with Southern Cross Cables Limited to acquire additional transpacific network capacity that will bring the Company’s total Southern Cross Capacity between Australia and the U.S. to 100 Gbps

The Company has completed NBN B2B acceptance. NBN B2B is the Business to Business interface that allows RSP’s to directly integrate their platforms onto the NBN platform. This integration represents a significant investment by the Superloop software development team in delivering an automated provisioning and service experience for customers with NBN Co

Ashleigh Loughnan has been appointed as Group Head of Human Resources

Telstra Corporation Limited (30 July) announced its executive reorganisation as part of its T22 strategy with the following structural and group executive changes:

Warwick Bray, Stephen Elop, Will Irving and Joe Pollard will be leaving Telstra.

Warwick has been Chief Financial Officer since 2015

Stephen has been important in guiding Telstra’s corporate strategy as a Group Executive and building the company’s technology credentials since he joined in April 2016

Will joined Telstra in 1997 and held a variety of legal roles prior to becoming Group General Counsel in 2005

Joe joined Telstra in 2014 initially as Group Managing Director Marketing and Media before becoming Chief Marketing Officer and Group Executive Media the following year

Robyn Denholm will move to the role of Chief Financial Officer & Head of Strategy

Alex Badenoch, Transformation & People will lead the T22 strategy transformation execution as well as drive the way the company works and operates, strengthening employee engagement. A Transformation Delivery Office has also been established to deliver an integrated and disciplined approach to implementation

Michael Ebeid will join Telstra from SBS to run the Enterprise team servicing Australian and international business and government customers with market-leading solutions and services. Michael will start at Telstra on 8 October

Vicki Brady will continue to lead Consumer & Small Business designing digitally-led propositions for customers, managing customer relationships with superior sales and services capabilities, to acquire new customers and grow Telstra’s base

Nikos Katinakis , previously from Reliance Jio, will join Telstra in mid-October to lead Networks & IT focused on extending the company’s network superiority and enabling digital experiences with world-leading technology execution

Brendon Riley will become the CEO of Telstra InfraCo which will efficiently leverage the InfraCo assets and drive growth in the Wholesale market, while creating future strategic optionality for these highly valuable assets

David Burns, currently with the Enterprise team, will lead Global Business Services (GBS) to bring together and radically simplify customer service operations and internal support services. GBS will drive a consistent approach to customer experience, efficiency and service levels. David’s appointment is effective today

Carmel Mulhern, Legal & Corporate Affairs will continue in her role engaging external stakeholders, including relationships with government and community. Carmel will also continue to hold the office of Group General Counsel and manage the internal provision of legal advice

Product & Technology will drive an integrated product and technology roadmap for all of Telstra to deliver innovative and simple product experiences that lead the market and drive profitable growth. An external appointment has been made for this Group Executive role and the person will be announced shortly

Vocus Group Limited (9 July) announced that Jon Brett and Rhoda Phillippo, both Non-Executive directors, will retire from the Board with effect from 22 August 2018

Forward EV / EBITDA Multiples Chart

The forward EV / EBITDA multiples for leading telco stocks at the end of the month is as follows:

Telecom stocks were trading on an average forward EV / EBITDA of 9.4x and a median forward EV / EBITDA of 8.2x

Media Monthly WrapMedia Best and Worst Monthly Performers

The 5 best and worst performers for the month of May 2018 were as follows:

Key Company Announcements

Carsales.Com Limited (4 July) announced that it has entered into common terms for a series of new bilateral debt facility agreements to replace its existing debt facility. This follows carsales’ acquisition of the remaining 50.1% of South Korea’s SK ENCARSALES.COM Ltd earlier this year. The new facilities will provide carsales with $545,000,000 of committed funding via $335,000,000 in 3 year revolving cash advance facilities and $210,000,000 in 5 year revolving cash advance facilities. The new facilities will assist with funding of future acquisition opportunities as well as working capital and operational requirements

Carsales.Com Limited (4 July) announced the appointment of Kee Wong to its Board of Directors as a Non-executive Director effective 9 July 2018

Domain Holdings Australia Ltd. (3 July) announced the appointment of Jason Pellegrino to the role of Managing Director and Chief Executive Officer (CEO), effective 27 August 2018

Fairfax Media Limited (26 July) Nine Entertainment Co. Holdings Limited (Nine) and Fairfax Media Limited (Fairfax) announced that the companies have entered into a Scheme Implementation Agreement under which the companies will merge to establish Nine as one of Australia’s leading independent media companies (Proposed Transaction). The Proposed Transaction will be implemented by Nine acquiring all Fairfax shares under a Scheme of Arrangement (Scheme). Following completion of the Proposed Transaction, Nine shareholders will own 51.1% of the combined entity with Fairfax shareholders owning the remaining 48.9%. The combined business will be led by Nine’s current Chief Executive Officer, Hugh Marks. The combined business will include Nine’s free-to-air television network, a portfolio of high growth digital businesses, including Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio interests through Macquarie Media. Under the Proposed Transaction, Fairfax shareholders will receive consideration comprising: 3627 Nine shares for each Fairfax share held (Scrip Consideration) and $0.025 cash consideration per Fairfax Share (Cash Consideration)

Fairfax Media Limited (18 July) announced that it has entered into agreements with News Corp Australia that will see the publishers use each other’s printing networks. News Corp will provide a range of printing services for Fairfax in New South Wales and Queensland. Fairfax will print publications for News Corp out of its North Richmond (NSW) plant

iCar Asia Ltd. ( 12 July) reported that cash collections for the second quarter of 2018 showed an increase of A$0.7 million or 29.0% over the same period last year, and totaled A$3.2 million. This is the Company’s highest ever quarterly cash receipts

Nine Entertainment Co. Holdings Pty Ltd. (26 July) Nine Entertainment Co. Holdings Limited (Nine) and Fairfax Media Limited (Fairfax) announced that the companies have entered into a Scheme Implementation Agreement under which the companies will merge to establish Nine as one of Australia’s leading independent media companies (Proposed Transaction). The Proposed Transaction will, subject to required approvals, be implemented by Nine acquiring all Fairfax shares under a Scheme of Arrangement (Scheme). Following completion of the Proposed Transaction, Nine shareholders will own 51.1% of the combined entity with Fairfax shareholders owning the remaining 48.9%. The combined business will be led by Nine’s current Chief Executive Officer, Hugh Marks. The combined business will include Nine’s free-to-air television network, a portfolio of high growth digital businesses, including Domain, Stan and 9Now, as well as Fairfax’s mastheads and radio interests through Macquarie Media. Under the Proposed Transaction, Fairfax shareholders will receive consideration comprising: 3627 Nine shares for each Fairfax share held (Scrip Consideration) and $0.025 cash consideration per Fairfax Share (Cash Consideration)

oOh media Ltd (13 July) announced the successful completion of the retail component of its 1 for 2.3 fully underwritten pro rata accelerated non-renounceable entitlement offer of new fully paid ordinary shares (New Shares); details of which were announced to ASX on Monday, 25 June 2018 (Entitlement Offer or Offer)

Pacific Star Network Limited (30 July) issued an announcement advising that Crocmedia Pty Ltd, a wholly owned subsidiary of the Company, had acquired the AFL Record subject to satisfaction of standard conditions

Pacific Star Network Limited (25 July) Crocmedia Pty Ltd, a wholly-owned subsidiary of Pacific Star Network Limited (Company), is pleased to announce that it has signed an agreement with the Australian Football League (AFL) to acquire the AFL Publications business (AFL Record). Crocmedia will produce all weekly match-day magazine content, including the AFL Record, AFLW publications, the AFL Season Guide, JLT Community Series, AFLX, International Rules Series, and the AFL Finals and Toyota AFL Grand Final editions

Pacific Star Network Limited (15 July) Crocmedia, wholly-owned subsidiary of ASX listed Pacific Star Network Limited, today announced that it had agreed to acquire a 25.0% shareholding in NBL club, Melbourne United

Village Roadshow Limited (31 July) announced the successful completion of the retail component of its previously announced fully underwritten 5 for 26 pro rata accelerated non-renounceable entitlement offer (“Entitlement Offer”) of new fully paid VRL ordinary shares (“New Shares”) to raise approximately $51.0 million. $15.7 million in gross proceeds were raised under the retail component of the Entitlement Offer ("Retail Entitlement Offer") and 63.0% of retail entitlements were taken up under the Retail Entitlement Offer

Village Roadshow Limited (10 July) announced an underwritten 5 for 26 pro rata accelerated non-renounceable entitlement offer of fully paid ordinary shares of VRL. The offer will raise ~A$51.0 million and the proceeds will be used to reduce borrowings. VRL expects to report FY18F EBITDA of $88.0 - $92.0 million, and adjusted FY18F EBITDA of $98.0 –$102.0 million

Village Roadshow Limited (2 July) announced that it has signed an agreement to sell its wholly owned Wet‘n’Wild Water Park located in Western Sydney to Parques Reunidos, for an amount of $40.0 million plus a variable compensation that will depend on the Park’s revenue performance up to 30 June 2020. The transaction is expected to complete in the first quarter of FY2019

WPP AUNZ Limited (6 July) announced that non-executive Director Jon Steel has indicated his intention to step down from the Board prior to the end of the calendar year

Forward EV / EBITDA Multiples Chart

The forward EV / EBITDA multiples for leading media stocks at the end of the month is as follows:

Media stocks were trading on an average forward EV / EBITDA of 11.8x and a median forward EV / EBITDA of 9.4x

Tech Monthly Wrap 

The 5 best and worst performers for the month of May 2018 were as follows:

Key Company Announcements

Afterpay Touch Group Ltd. (19 July) announced its business update for the quarter ended 30 June 2018 (Q4 FY18) and the financial year ended 30 June 2018 (FY18). Underlying sales in Q4 FY18 has increased by 171% over Q4 FY17 and by 39.0% over Q3 FY18. Afterpay’s U.S. business picked up a strong start since launching in mid-May 2018 (over $11.0 million of underlying sales in the first full month, June 2018). Over 400 retailer contracts signed and over 200 retailers currently transacting on the platform, including major millennial focused brands, URBAN OUTFITTERS (live since 16 May 2018) and REVOLVE (live since 9 July 2018). Strong underlying growth and performance continued in Q4 FY18 with respect to all key metrics. Afterpay was also recognised by its peers and the industry for being awarded ‘Fintech Organization of the Year’ by Fintech Australia at the recent 2018 FINNIES event

BIG Un Limited (30 July) announced its half year results ended 31 December 2017. The Company recorded a 29.0% increase in revenue from the AASB15 restated prior comparative period. From 1 January 2018, the Big Review TV Ltd team continued to focus on building the business model through the sale of video memberships and increased delivery and development of video products

BIG Un Limited (3 July) announced that Francis Farmakidis has resigned as the Company Secretary

Big Un Limited (2 July) announced that the creditors approved the implementation of a deed of company arrangement ("DOCA"). Under the terms of the DOCA, Cameron Gray and Anthony Elkerton have been appointed joint and several Deed Administrators.

BRTV, AS Capital Ventures Pty Limited (ASCV) and the administrators entered into an intellectual property sale agreement under which ASCV acquired all of the intellectual property assets of BRTV ("IP Sale Agreement")

BIG and ASCV entered into a rights and asset transfer agreement whereby BIG has transferred the Tipsly application code and media rights (including the BIG video content library, customer records, key agreement rights and brand and website rights) to ASCV ("Asset Transfer Agreement")

BIG and ASCV entered into a license agreement whereby ASCV has granted BIG and its subsidiaries an exclusive license to use all intellectual property sold to ASCV under the IP Sale Agreement and Asset Transfer Agreement in Australia

ASCV has also agreed to factor up to $500,000 of BRTV's contracts at an advance rate of 80.0% over the next 8 weeks to assist with the group's cashflow. BIG has completed a transaction with The Intermedia Group Pty Ltd (IMG) pursuant to which BIG has transferred to IMG all of the issued capital of BHA Media Pty Ltd, ("BHA") Food and Beverage Group Pty Ltd ("FAB") and A List Guide Pty. Limited ("LAG"). BIG also transferred 1,000 shares in Wayfarer Media Pty Ltd, such that IMG now owns 51.0% of that company and BIG owns 49.0%

Catapult Group International (26 July) announced unaudited financial and operating results for the full year to 30 June 2018 (‘FY18’). The Company has recorded revenue of $76.8 million, 26.0% growth on a reported basis and 19.0% on a pro-forma basis. Recorded Group underlying EBITDA of $0.6 million

Class Ltd. (4July) announced its results for the quarter ending 30 June 2018. Total accounts increased by 5,158 to 169,413, Total accounts include 163,464 SMSFs on Class Super and 5,949 Class Portfolio accounts. Total Class customers increased to 1,367 with a quarterly increase of 51 new customers and Class Portfolio grew by 12.0% to 5,949 accounts, the second largest growth period on record, and 31.0% of Class Super clients now use Class Portfolio

Data#3 Limited (18 July) announced that subject to finalization of the Discovery Technology Pty Ltd result (77.4% owned by Data#3), and the Data#3 group year-end audit, the consolidated net profit before tax (NPBT) for FY18 is estimated to be ~$20.4 million (FY17 $22.4 million)

ELMO Software Ltd. (30 July) announced Q4FY18 results with strong performance. Strong growth in cash receipts during Q4FY18 to $9.9 million , up 86.0% on prior comparable period. Growth in cash receipts for the full year FY18 to $28.2 million, an increase of 55.0%. Closing cash balance of $46.1 million, as at 30 June 2018 - ELMO is well capitalised to fund the Company’s accelerated growth strategy and remains focused on continuing to deliver organic growth across the existing business. Strong pipeline of sales opportunities going into FY19 with ELMO’s broad solution offering and growing customer base

Gentrack Group Ltd (30 July) announced that it has successfully completed the retail entitlement offer component (“Retail Entitlement Offer”) of its underwritten 1 for 5.77 pro-rata accelerated entitlement offer (“Offer”) of new fully paid ordinary shares in Gentrack (“New Shares”) announced on Wednesday 4 July 2018. A total of approximately NZ$90.0 million will be raised under the Offer

Gentrack Group Ltd (10 July) announced that it would conduct a fully underwritten prorate accelerated entitlement offer to eligible shareholders to subscribe for 1 new fully paid ordinary share in Gentrack (New Shares) for every 5.77 existing fully paid ordinary shares in Gentrack (Existing Shares) held on 6 July 2018 (Record Date) at an offer price of NZ$6.2 per New Share (Offer Price) (Offer), to raise ~NZ$90.0 million (before costs). The Offer is fully underwritten

Gentrack Group Ltd (9 July) that it has successfully completed the institutional entitlement offer component (“Institutional Entitlement Offer”) and the institutional shortfall bookbuild component (“Institutional Shortfall Bookbuild”) of its underwritten 1 for 5.77 pro-rata accelerated entitlement offer (“Offer”) of new fully paid ordinary shares in Gentrack (“New Shares”) announced on Wednesday 4 July 2018. A total of approximately NZ$90.0 million will be raised under the Offer

Gentrack Group Ltd (4 July) announced that it intends to raise approximately NZ$90.0 million of new equity through a fully underwritten accelerated entitlement offer. Proceeds raised through the Offer will be used to pay down Gentrack's existing bank debt, providing funding capacity to support future acquisition and growth opportunities

Gentrack Group Ltd (1 July) announced that it has made "significant progress towards several new customer wins" in the US and Australia that will contribute to its fiscal 2019 results

GetSwift Ltd.(30 July) announced unaudited report for the period ending 30 June 2018. Transactions for the quarter were 1,427,358 an increase of approximately 95.6% from the results of the equivalent quarter last year, and a sequential increase of 19.4% from the preceding quarter. Revenue was $403,828 for the quarter representing an increase of 65.2% on the equivalent quarter last year and an increase 10.9% from the preceding quarter

Impelus Ltd (24 July) announced an update in relation to the Company’s progressive exit from its Direct Carrier Billing (DCB) operations. With the continuing scale up of the Company’s Digital Performance Marketing (DPM) operations with a focus on premium lead generation, the identification of organic growth opportunities in the UK followed by the anticipated springboard into the European market and the recent launch of a number of DPM Growth Platforms in Australia and impending launches in the UK, the Board has resolved not to pursue the claim against a telecommunications carrier as initially announced to the ASX on 1 February 2018 at this time

Impelus Ltd (20 July) announced the completion of its capital raising program announced to the ASX on 6 June 2018. Under the capital raising a total of $2,278,500 was raised between the placement and Share Purchase Plan (SPP). The funds raised will be used for digital asset deployment, Australian marketing and UK market expansion as the Company aims to scale up its digital customer acquisition business, working capital purposes and for growth opportunities

Impelus Ltd (5 July) announced its market update for the first half year. It was currently developing the growth platform of its DPM business with the roll-out of more digital Lead Generation/Customer Acquisition tools that deliver better qualified customer leads to clients cost effectively. The scale down of non-core activities including Clipp and Direct Carrier Billing (DCB) so that their costs are substantially reduced and with DCB still delivering positive cash generation in the run-off phase. The Company is significantly reducing the Company’s overall cost base and lowering debt levels substantially

Integrated Research Limited (12 July) announced that Anne Myers has been appointed to the Board as a Non-Executive Independent Director with effect from 12th July 2018

Integrated Research Limited (12 July) announced that it was in the early stages of preparing its financial statements for the year ended 30 June 2018. Based on internal management accounts and subject to audit, the Company anticipates total revenue growth to be flat and profit after tax growth to be up between 1.0% and 5.0% when compared to the previous financial year

iSentia Group Limited (20 July) announced the appointment of Travyn Rhall and Justin Kane as Non-Executive Directors and the retirement of Geoff Raby, who joined iSentia’s Board as Non-Executive Director in May 2014

iSentia Group Limited (6 July) announced the appointment of Ed Harrison as Managing Director and Chief Executive Officer and the resignation of James Orlando as Chief Financial Officer

iSentia Group Limited (2 July) announced that the term of the current license between its subsidiary Isentia Pty Limited and Copyright Agency Limited to reproduce, and to communicate to its customers, licensed works for the purposes of providing press monitoring and online monitoring services has been extended from 1 July 2018 pending the outcome of the Copyright Tribunal of Australia making a determination with respect to Isentia’s application for interim orders or any agreement between the parties

Kogan.com Ltd. (24 July) announced the results for the quarter ended 30 June 2018. The Company ended 4QFY18 with cash of $41.9 million. The Company produced a net operating cash flow of $24.5 million in the quarter (4QFY18). Revenue growth in FY18 compared with FY17 is greater than 40.0%

Nearmap Ltd. (10 July) announced that the results for FY18 are expected to show record growth in group Annualised Contract Value (ACV), exceeding guidance provided at the time of the H1 FY18 results. Closing group ACV portfolio has grew by 41.0%. Recorded annual increase in ACV of $19.2 million. H2FY18 growth increased by 67.0% and exceeded ACV growth for the full year FY2017 and the U.S. portfolio has doubled, the largest annual ACV growth in the history of Nearmap’s U.S. operations

Nearmap Ltd. (9 July) announced that in accordance to the contract, Sue Klose completed her role as Interim Chief Marketing Officer on 5 July 2018 and returned to her role as non-executive director of the Company, effective from 6 July 2018

Netwealth Group Ltd. (13 July) announced that the Company has reached $17.9 billion funds under administration with $1.9 billion increase in Q4. Netwealth won the award for ‘Best Advised Product’ in the annual Chant West Super Awards – 2018

Pushpay Holdings Ltd (17 July) announced annual shareholder’s meeting 2018 highlights. The Company disclosed that 13 of the top 20 and 54 of the top 100 largest churches in the U.S. have chosen to partner with Pushpay. It has delivered on its FY18 guidance of US$70.0 million. The annualized processing volume increased from US$1.1 billion to over US$3.0 billion and the number of transactions processed also rose from 6.1 million to 12.3 million over the year

Technology One Limited (17 July) announced changes to its accounting policies as it adopts IFRS 15 / AASB 15 and transitions to SaaS accounting starting in the Financial Year 2019. These new accounting policies in FY19 will make reporting for SaaS simpler.

Technology One Limited (17 July) announced outlook for year 2018 with expectations for NPAT growth of 10.0% to 15.0% for the full year

Webjet Limited (30 July) announced the resignation of Michael Sheehy as Company Secretary effective 31 July 2018. Tony Ristevski, Chief Financial Officer will assume the role of Company Secretary effective 31 July 2018

Xero Limited (20 July) announced a strategic alliance with leading full-service U.S. payroll platform Gusto that will integrate Xero’s platform in the U.S. with Gusto to provide customers access to full-service payroll in all 50 States

Xero Limited (10 July) announced that Chief Operating and Financial Officer Sankar Narayan will leave Xero at the end of December 2018 to pursue other opportunities

Zip Co Ltd. (19 July) announced its quarterly performance for the period ending 30 June 2018. The Company has recorded quarterly revenue of $13.2 million, up by 18.0% and transactions volume of $172 million, up by 26.0% on Q3. Super Retail Group (SRG) and Officeworks joined the Zip platform and will go live in Q1 FY19

Forward EV / EBITDA Multiples Chart

The forward EV / EBITDA multiples for leading tech stocks at the end of the month is as follows:

Technology stocks were trading on an average forward EV / EBITDA of 12.9x and a median forward EV / EBITDA of 11.7x

Reference stocks

Our reference portfolio is as follows:

Telecom Stocks:

5G Networks (5GN-AU), amaysim Australia Ltd. (AYS-AU), Chorus Limited (CNU-NZ), Hutchison Australia (HTA-AU), Inabox Group Ltd. (IAB-AU), Macquarie Telecom Group Limited (MAQ-AU), Megaport (MP1-AU), MNF Group Limited (MNF-AU), Netcom Wireless (NTC-AU), Nextdc Limited (NXT-AU), Over the wire (OTW-AU), Singapore Telecommunications Limited (Z74-SG), Spark New Zealand Limited (SPK-NZ), SpeedCast International Ltd (SDA-AU), Spirit Telecom (ST1-AU), Superloop Ltd. (SLC-AU),  Telstra Corporation Limited (TLS-AU), TPG Telecom Limited (TPM-AU), Vita (VTG-AU), Vocus Group Limited (VOC-AU)

Media Stocks:

APN Outdoor Group Ltd. (APO-AU), Carsales.Com Limited (CAR-AU), Domain Holdings Australia Ltd. (DHG-AU), Asia Pacific Digital Limited (DIG-AU), Event Hospitality & Entertainment Ltd. (EVT-AU), Fairfax Media Limited (FXJ-AU), HT&E Ltd (HT1-AU), iCar Asia Ltd. (ICQ-AU), Macquarie Media Limited (MRN-AU), Nine Entertainment Co. Holdings Pty Ltd. (NEC-AU), News Corporation Shs B Chess Depository Interests repr 1 Sh (NWS-AU), oOh media Ltd (OML-AU), Pacific Star Network Limited (PNW-AU), Prime Media Group Limited (PRT-AU), REA Group Ltd (REA-AU), Seek Limited (SEK-AU), SKY Network Television Limited (SKT-AU), Seven West Media Limited (SWM-AU), Southern Cross Media Group Limited (SXL-AU), Trade Me Group Limited (TME-NZ), Village Roadshow Limited (VRL-AU), WPP AUNZ Limited (WPP-AU)

Tech Stocks:

3P Learning Ltd. (3PL-AU), Altiumc (ALU-AU), Afterpay Touch Group Ltd. (APT-AU), Appen Ltd. (APX-AU), Big Un Limited (BIG-AU), Bravura Solutions Limited (BVS-AU), Catapult Group International Ltd. (CAT-AU), Citadel Group Ltd. (CGL-AU), Class Ltd. (CL1-AU), Crowd Mobile Limited (CM8-AU), Computershare Limited (CPU-AU), Data#3 Limited. (DTL-AU), DWS Limited (DWS-AU), ELMO Software Ltd. (ELO-AU), GetSwift Ltd. (GSW-AU), Gentrack Group Ltd (GTK-NZ), Hansen Technologies Limited (HSN-AU), Impelus Ltd (IMS-AU), Infomedia Ltd (IFM-AU), IRESS Limited (IRE-AU), Integrated Research Limited (IRI-AU), iSentia Group Limited (ISD-AU), Kogan.com Ltd. (KGN-AU), Link Administration Holdings Ltd. (LNK-AU), Melbourne IT Ltd (MLB-AU), MYOB Group Ltd. (MYO-AU), Nearmap Ltd. (NEA-AU), Netwealth Group Ltd. (NWL-AU),  OFX Group Ltd. (OFX-AU), Pro Medicus Limited (PME-AU), Pushpay Holdings Ltd (PPH-NZ), Reckon Limited (RKN-AU), Technology One Limited (TNE-AU), Webjet Limited (WEB-AU), Wisetech Global Ltd. (WTC-AU), Xero Limited (XRO-NZ), Zip Co Ltd. (ZML-AU)

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