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Millennium Services Group Ltd / Equity Bottom-Up

<ul><li>Human services company Millennium Services Group Ltd (ASX:MIL) has entered a Scheme of Arrangement with an entity associated with Softbank Robotics Singapore for the acquisition of 100% of shares at $1.15/share cash.</li><li>Shareholders also have the option to accept a mix of cash and scrip in the new unlisted entity, with certain management committing not less than a total of 30% for this option.</li><li>The bid price represents an 89% premium to the last RaaS update note (October 23) and 360% premium from July 1, 2023. </li></ul>

Human services company Millennium Services Group Ltd (ASX:MIL) has entered a Scheme of Arrangement with an entity associated with Softbank Robotics Singapore for the acquisition of 100% of shares at $1.15/share cash.Shareholders also have the option to accept a mix of cash and scrip in the new unlisted entity, with certain management committing not less than a total of 30% for this option.The bid price represents an 89% premium to the last RaaS update note (October 23) and 360% premium from July 1, 2023. 

Millennium Services Group Ltd - Bid Implies an EV/EBITDA Multiple In-Line with Peers

<ul><li>Millennium Services Group Ltd (ASX:MIL) has released its Q1 FY24 cash flow incorporating updated revenue commentary.</li><li>Contracted revenue rose 14.3%, an acceleration on Q4 FY23 on the back of new contract wins and wage inflation.</li><li>Total growth was 12.6%, the strongest growth since H2 FY18. Operating cash flow was negative $3.6m, a 23% improvement on the pcp (implying improved gross margins) with both impacted by the timing of collections and an additional fortnightly wage payment. </li></ul>

Millennium Services Group Ltd (ASX:MIL) has released its Q1 FY24 cash flow incorporating updated revenue commentary.Contracted revenue rose 14.3%, an acceleration on Q4 FY23 on the back of new contract wins and wage inflation.Total growth was 12.6%, the strongest growth since H2 FY18. Operating cash flow was negative $3.6m, a 23% improvement on the pcp (implying improved gross margins) with both impacted by the timing of collections and an additional fortnightly wage payment. 

Millennium Services Group Ltd - Strongest Quarterly Revenue Growth Since H2 FY18

<ul><li>Millennium Services Group Ltd (ASX:MIL) has provided an update on Q4 FY23 revenue, cash flow from operating activities, and the H2 FY23 gross margin. MIL delivered 8.0% (RaaS 9.6%) revenue growth in Q4 FY23 and 2.0% over FY23 on the back of new contract wins and wage inflation. Q4 FY23 cash flow turned positive with the group ending FY23 with just $1.2m net debt.</li><li>The H2 FY23 GP% came in below implied guidance and RaaS estimates at 14.4% against ~15.9% forecast, attributed to wage pressure in a tight labour market.</li><li>While most contracts have an annual contract adjustment clause for wage increases, the timing and magnitude of recent award increases is proving difficult to manage. </li></ul>

Millennium Services Group Ltd (ASX:MIL) has provided an update on Q4 FY23 revenue, cash flow from operating activities, and the H2 FY23 gross margin. MIL delivered 8.0% (RaaS 9.6%) revenue growth in Q4 FY23 and 2.0% over FY23 on the back of new contract wins and wage inflation. Q4 FY23 cash flow turned positive with the group ending FY23 with just $1.2m net debt.The H2 FY23 GP% came in below implied guidance and RaaS estimates at 14.4% against ~15.9% forecast, attributed to wage pressure in a tight labour market.While most contracts have an annual contract adjustment clause for wage increases, the timing and magnitude of recent award increases is proving difficult to manage. 

Millennium Services Group Ltd - Gross Margin Pressures Offset Slightly by Higher Revenue

<ul><li>Millennium Services Group Ltd (ASX:MIL) has announced an update on Q3 FY23 revenue and cash flow from operating activities.</li><li>MIL achieved the first positive quarterly revenue growth since Q1 FY22 at +3.5%, while contract revenue growth was ~+12.6% on the pcp (excludes ad-hoc revenue).</li><li>The COVID-related ad-hoc revenue has now all but cycled out of the quarterly numbers while new contract wins cycle in. </li></ul>

Millennium Services Group Ltd (ASX:MIL) has announced an update on Q3 FY23 revenue and cash flow from operating activities.MIL achieved the first positive quarterly revenue growth since Q1 FY22 at +3.5%, while contract revenue growth was ~+12.6% on the pcp (excludes ad-hoc revenue).The COVID-related ad-hoc revenue has now all but cycled out of the quarterly numbers while new contract wins cycle in. 

Millennium Services Group Ltd - Contract Wins Now Evident in the Numbers

<ul><li>Millennium Services Group Ltd (ASX:MIL) has delivered a H1 FY23 result well below prior forecast, with a two-month timing lag between wage increases and pass-through impacting the gross margin over H1 FY23 (down ~190bps to 14%).</li><li>With these costs now passed through under contract, gross margins improved in Q2 FY23 and are forecast to average around 15% for FY23, implying H2 FY23 margins of ~16%.</li><li>This combined with ~$25m-$30m of new contract business wins over the past six months puts the business in good stead for solid growth in H2 FY23 and into FY24. </li></ul>

Millennium Services Group Ltd (ASX:MIL) has delivered a H1 FY23 result well below prior forecast, with a two-month timing lag between wage increases and pass-through impacting the gross margin over H1 FY23 (down ~190bps to 14%).With these costs now passed through under contract, gross margins improved in Q2 FY23 and are forecast to average around 15% for FY23, implying H2 FY23 margins of ~16%.This combined with ~$25m-$30m of new contract business wins over the past six months puts the business in good stead for solid growth in H2 FY23 and into FY24. 

Millennium Services Group Ltd - Solid Growth Ahead with Contract Wins

Australia

Millennium Services Group Limited provides cleaning and security services. The Company offers guard and protection, planned preventative maintenance, contractor management, facilities, and maintenance services. Millennium Services Group serves customers in Australia and New Zealand.

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Millennium Services Group Ltd (MIL AU)

Millennium Services Group Ltd - Bid Implies an EV/EBITDA Multiple In-Line with Peers

Human services company Millennium Services Group Ltd (ASX:MIL) has entered a Scheme of Arrangement with an entity associated with Softbank Robotics...

Research as a Service (RaaS)

Millennium Services Group Ltd - Strongest Quarterly Revenue Growth Since H2 FY18

Millennium Services Group Ltd (ASX:MIL) has released its Q1 FY24 cash flow incorporating updated revenue commentary. Contracted revenue rose 14.3%,...

Research as a Service (RaaS)

Millennium Services Group Ltd - Gross Margin Pressures Offset Slightly by Higher Revenue

The H2 FY23 GP% came in below implied guidance and RaaS estimates at 14.4% against ~15.9% forecast, attributed to wage pressure in a tight labour...

Research as a Service (RaaS)

Millennium Services Group Ltd - Contract Wins Now Evident in the Numbers

Millennium Services Group Ltd (ASX:MIL) has announced an update on Q3 FY23 revenue and cash flow from operating activities.

Research as a Service (RaaS)

Millennium Services Group Ltd - Solid Growth Ahead with Contract Wins

This combined with ~$25m-$30m of new contract business wins over the past six months puts the business in good stead for solid growth in H2 FY23...

Research as a Service (RaaS)

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