New Zealand Professional Investment Services Firm

Forsyth Barr

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New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>PX1,&nbsp;Plexure 1H22 result first take</h2>
Plexure (PX1) reported a disappointing 1H22 result missing revenue expectations by 10% and an NPAT loss significantly below our forecasts
With no mention of FY22 guidance we assume it remains unchanged at NZ$45m-NZ$47m of revenue for the year
The company has stated it is looking to move to a single exchange listing under an operational restructure in order to aid its intended return to profitability
PX1 has also noted supply shortages for hardware related to COVID-19 which has impacted 1) the timing of hardware sales and 2) the commencement of software revenue
Operational review concluded
<ul>
<li>The conclusion of the new management team’s operational review is that the previous management’s strategy of selling to additional customers internationally has not generated the sales growth expected and the company will now be moving in a new direction.</li>
<li>This is likely to revolve around cross-selling to existing customers the different elements of the Plexure/TASK offering</li>
<li>The company has highlighted the Pita Pit contract whereby the new management team has recently cross-sold the TASK proposition on the back of a previous PX1 contract (and extended the contract from 3 to 5 years)</li>
</ul>
Financials
<ul>
<li>Of the NZ$8.5m loss for the period, NZ$2.1m is reportedly related to the TASK acquisition and higher recruitment costs</li>
<li>We assume the current MacDonald’s contract has been the driver behind the additional cost to the business from existing customers - but with little revenue compensation generated (given the historic contract details based on store growth vs user growth). PX1 notes the increase in client activity costs of 40% vs the previous year</li>
<li>Revenue missed by -NZ$1.5 for 1H22, reported at NZ$13.5m down from NZ$14.4m at 1H21</li>
<li>PX1’s balance sheet reported net cash of NZ$9.8m</li>
</ul>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 103.8pt; height: 13pt;">
(NZ$m)
</td>
<td style="width: 44.8pt; height: 13pt;">
1H21
</td>
<td style="width: 44.8pt; height: 13pt;">
1H22E
</td>
<td style="width: 44.8pt; height: 13pt;">
1H22A
</td>
<td style="width: 44.8pt; height: 13pt;">
Var
</td>
</tr>
<tr>
<td style="width: 103.8pt; height: 13pt;">
Revenue
</td>
<td style="width: 44.8pt; height: 13pt;">
14.4
</td>
<td style="width: 44.8pt; height: 13pt;">
14.9
</td>
<td style="width: 44.8pt; height: 13pt;">
13.5
</td>
<td style="width: 44.8pt; height: 13pt;">
-9.7%
</td>
</tr>
<tr>
<td style="width: 103.8pt; height: 13pt;">
EBITDA
</td>
<td style="width: 44.8pt; height: 13pt;">
(3.1)
</td>
<td style="width: 44.8pt; height: 13pt;">
(3.2)
</td>
<td style="width: 44.8pt; height: 13pt;">
(6.9)
</td>
<td style="width: 44.8pt; height: 13pt;">
116.9%
</td>
</tr>
<tr>
<td style="width: 103.8pt; height: 13pt;">
EBITDA margin %
</td>
<td style="width: 44.8pt; height: 13pt;">
-21%
</td>
<td style="width: 44.8pt; height: 13pt;">
-21%
</td>
<td style="width: 44.8pt; height: 13pt;">
-51%
</td>
<td style="width: 44.8pt; height: 13pt;">
-29.8%
</td>
</tr>
<tr>
<td style="width: 103.8pt; height: 13pt;">
NPAT
</td>
<td style="width: 44.8pt; height: 13pt;">
(4.4)
</td>
<td style="width: 44.8pt; height: 13pt;">
(4.8)
</td>
<td style="width: 44.8pt; height: 13pt;">
(8.5)
</td>
<td style="width: 44.8pt; height: 13pt;">
77.6%
</td>
</tr>
</tbody>
</table>
Analyst call 11am NZT
<a href="https://www.plexure.com/announcement/px1_notification_of_interim_results/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://www.plexure.com/announcement/px1_notification_of_interim_results/&amp;source=gmail&amp;ust=1637198576521000&amp;usg=AOvVaw1xR3dywlzbt4mDI4MQAZ2G" rel="noopener">PX1 Notification of Interim Results Announcement Date - Plexure</a>

PX1,&nbsp;Plexure 1H22 result first take
Plexure (PX1) reported a disappointing 1H22 result missing revenue expectations by 10% and an NPAT loss significantly below our forecasts
With no mention of FY22 guidance we assume it remains unchanged at NZ$45m-NZ$47m of revenue for the year
The company has stated it is looking to move to a single exchange listing under an operational restructure in order to aid its intended return to profitability
PX1 has also noted supply shortages for hardware related to COVID-19 which has impacted 1) the timing of hardware sales and 2) the commencement of software revenue
Operational review concluded

The conclusion of the new management team’s operational review is that the previous management’s strategy of selling to additional customers internationally has not generated the sales growth expected and the company will now be moving in a new direction.
This is likely to revolve around cross-selling to existing customers the different elements of the Plexure/TASK offering
The company has highlighted the Pita Pit contract whereby the new management team has recently cross-sold the TASK proposition on the back of a previous PX1 contract (and extended the contract from 3 to 5 years)

Financials

Of the NZ$8.5m loss for the period, NZ$2.1m is reportedly related to the TASK acquisition and higher recruitment costs
We assume the current MacDonald’s contract has been the driver behind the additional cost to the business from existing customers - but with little revenue compensation generated (given the historic contract details based on store growth vs user growth). PX1 notes the increase in client activity costs of 40% vs the previous year
Revenue missed by -NZ$1.5 for 1H22, reported at NZ$13.5m down from NZ$14.4m at 1H21
PX1’s balance sheet reported net cash of NZ$9.8m





(NZ$m)


1H21


1H22E


1H22A


Var




Revenue


14.4


14.9


13.5


-9.7%




EBITDA


(3.1)


(3.2)


(6.9)


116.9%




EBITDA margin %


-21%


-21%


-51%


-29.8%




NPAT


(4.4)


(4.8)


(8.5)


77.6%




Analyst call 11am NZT
PX1 Notification of Interim Results Announcement Date - Plexure

Plexure Group

PX1, Plexure: 1H22 Result First Take