Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hello, Could the MM team please provide an updated view on C79, considering its most recent results? I recall it was in the emerging portfolio last year. I still hold this stock in my personal account and would appreciate insights on whether the latest results were strong enough to justify holding onto it, or if it might be better to sell and book a loss. Regards SK
Hi SK,
C79 released its 1H result and updated FY25 guidance this week. Revenue has been revised to the low end of the range, while earnings (EBITDA) is tracking below the mid-point. This looks largely related to deployment timing of their machines, which has been a trend in recent times and the reason we sold out last October. They deployed +5 in the 1H and are currently deploying +2 currently. On the analyst call, management highlighted that most of the units contracted in 1H will be deployed during FY25. This implies another +2 in the later months of 2H so it looks like +10 units will be deployed in FY25 which is lower than expected, by about 20%. The unit volumes are relatively small, so a reduction of 2 units is quite meaningful, plus, it implies they will struggle to deploy the +20 in FY26 that many had thought they would i.e. that would imply 100% growth on FY25 assuming they hit +10 this year.
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