Valuation Comparison, page-7

Now let’s turn to the detractors. Far and away the largest detractor to performance was Catapult Group, which entered the year as the Fund’s largest position and whose shares fell 47.4% during the year. Very little went right for the business: growth has been solid but underwhelming, two of the company’s directors and co-founders sold a meaningful chunk of their shares in early January, the business raised capital for the second time in less than a year at a valuation that made us wince, and shareholders delivered the company its first strike on remuneration. Suffice to say we’re disappointed with both the business and our position sizing heading into this fiscal year. Still, we have not thrown in the towel on this thesis as Catapult has a very loyal customer base and is still a leader in growing markets. Also, financially speaking, the current leadership team appears more structured and cost-conscious than the last, the business has plenty of cash in the bank, and the shares have an undemanding valuation with an enterprise value of only around 2.5 times consensus full-year revenue. We still also think Catapult could do well from here, and perhaps be a take-out target by a strategic buyer for the above reasons. For that matter, we would not be surprised to see a financial buyer show interest given the same reasons, the diverse and recurring revenue stream, and assorted offices and initiatives that could be sold, shuttered, or streamlined. Catapult’s cofounders would need to be on board with any sale but, in light of some of their share sales in January, we wouldn’t be surprised if they were supportive of someone cutting them a large cheque.


https://www.lakehousecapital.com.au/wp-content/uploads/2018/07/LSCF-June-2018-Annual-Letter.pdf


Funny thing is that Catapult is actually Lakehouse Capital largest position entering FY18?! Woww...I seriously didn't know that..I wonder why Motley Fool is not spruiking this in a more intense manner..looks like they are still holding on despite the share price falls..