Upgrade implies H2 16 EBITDA margin of 25.5% vs 14% in H1 16. Well on the way to the longer term 30% plus target.
Without winning any new clients, just some organic fund inflows from existing clients, and an overall EBITDA margin of say 27% could see FY17 EBITDA over $4m.
Most of the amortisation charge is acquired amortisation, depreciation is very low, interest charge will be lower than FY16 and no tax is payable for a few years. So FY17 cash profit will most likely exceed $3.5m vs current market cap of $43m (and that's after a takeover bid). Even better if they could win just a single admin client.
Time for OVH to revise their bid or someone else to show their hand
DVA Price at posting:
72.5¢ Sentiment: None Disclosure: Held
