As a long-term Breviile shareholder - which has spanned both good times and bad - for me this is one of the most significant strategically significant presentations I have seen.
The investment in the business for global scale-ability is palpable.
10x EV/EBITDA is not much to pay at all, I don't think for a business with BRG's track record of growth, its ROE, the value of its brands and its market opportunity over the next 5 years and beyond.
Dutifully, I have taken the market's unhappiness with something in the result (I'm not exactly sure what...the muted "Outlook" statement, I suspect, which contains the dreaded "challenging" word) I took the liberty of adding to my already-meaningful holdings.
PS. In response to your
"Page 4 of the presentation shows that:
- North America's revenue grew by 24% and EBIT increased by 37%, while
- Australia's revenue declined by 1% and EBIT declined by 9%"
I think that breaking things down into half-yearly figures gives a better feel of what is really happening in the troubled ANZ-facing business unit, namely that DH15 was down 31% on DH14, but JH16 was up 159% on JH15 ($5.3m in JH16 off admittedly small JH15 base of just $2.1m, but still sign of a turnaround nonetheless. And ANZ represents a big revenue base, so even modest margin gains magnify improvements in earnings.)
To be consistent, in North America DH15 EBIT was up 40% on pcp, and the JH16 figure was "only" up 31% but this was cycling a mammoth base of 62% growth registered in JH15).
And "Other" EBIT in JH16 was down 5% (exchange-rate related in non-UK markets, seemingly) compared to a 28% rise in DH15
BRG Price at posting:
$7.70 Sentiment: Buy Disclosure: Held
(20min delay)
