Does like BVS at current levels?
Hey team, Latest thoughts on BVS? Been slaughtered but strong sticky software, good pipeline, blue-chip customers, and seems to have weathered the pandemic period. Cheers
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Answer
Hi Matthew,
BVS has indeed been hammered from its ~$6 highs back in 2019 although the $1.60 level today is offering a clear degree of support. The company announced its FY22 result on Wednesday and the markets recovered well after initially dipping on the news:
- Revenue up 10% to A$266.7m (A$243.0m in FY21) but EBITDA margin1 decreased to 17% (20% in FY21) taking the FY22 EPS down 14% to 12.1cps
- Unfranked FY22 final dividend declared of 3.2cps, bringing the dividend pay-out ratio to 67% of FY22 adjusted NPAT.
The company is in a strong financial position holding $48.7mn in cash as of 30/6/22 and with a few high-quality deals in the pipeline the stocks interesting ~$1.60 but considering the last few years continuing disappointment it would be hard to justify holding if we see renewed weakness towards $1.40. Their UK operation is the key and as we know, that part of the word is struggling.
