logo
bullish

DXN Ltd

DXN - Q3 Cash Receipts up 218% on Pcp, Strong Cost Containment

208 Views01 May 2020 10:19
Issuer-paid
SUMMARY

DXN Ltd (ASX:DXN) is a vertically integrated prefabricated modular data centre business with manufacturing facilities in Perth and its own data centre, SYD01, at Sydney Olympic Park in Sydney.  The company has reported Q3 cash receipts of $$2.1m, up 218% on the previous corresponding quarter with strong cost containment evident in this result. The company noted that it had reduced staff costs by $0.645m or 39% from the prior period. Costs for the quarter were $2.9m, including manufacturing costs, well below our expectations. The strong cost containment suggests the company is tracking better than our forecasts for costs in 2H FY20. We are forecasting cash costs of $8.3m for 2H FY20, half of which is related to product manufacturing. We have not changed our forecasts for this half given the uncertain environment presented by COVID-19 but see the cost containment delivered by the company in Q3 as a good buffer against any deterioration in market conditions. Our base case DCF valuation is $0.08/share fully diluted, implying a forward 12 months EV/Sales multiple of 6.65x.

Begin exploring Smartkarma's AI-augmented investing intelligence platform with a complimentary Preview Pass to:
  • Unlock research summaries
  • Follow top, independent analysts
  • Receive personalised alerts
  • Access Analytics, Events and more

Join 55,000+ investors, including top global asset managers overseeing $13+ trillion.

Upgrade later to our paid plans for full-access.

or
Already have an account? Sign In Now
Discussions
(Paid Plans Only)
chart-bar
Logo
Research as a Service (RaaS)
Insightful Financial Models and Research Analysis
AustraliaEquity Bottom-UpThematic (Sector/Industry)
Price Chart(Sign Up to Access)
analytics-chart
  • DXN - Q3 Cash Receipts up 218% on Pcp, Strong Cost Containment
    01 May 2020

Copyright © 2022 Smartkarma Innovations Pte Ltd. All Rights Reserved. v3.34.2

x