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Shekel Brainweigh

Shekel Brainweigh - CY19 Updated for Audited Accounts and COVID-19

529 Views06 Apr 2020 08:03
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SUMMARY

Shekel Brainweigh Limited (ASX:SBW) has released its audited accounts for CY19 and an update on the impact of/response to COVID-19. On the audited account front the group has for the first time provided segment results for the “traditional” and “new retail” divisions. The key point to note is that adjusting the “traditional” divisional EBIT for a bad-debt provision and “growth” R&D, the division recorded EBIT of US$2.7m (A$4.5m). A 6x multiple implies a valuation of A$27m ($0.195/share) against the current market cap of $9.1m. The implied value in the current share price for the new retail division is therefore negative A$18m (or zero and the traditional business 2.0x EBIT) despite impressive technology partners, early commercialisation success and significant R&D to date. On the COVID-19 front, the group has significantly reduced salaries for the next 60-90 days and applied for a US$1.25m loan from the Israeli Government as part of that country’s COVID-19 package. Minimal impact has been felt to date with Q120 revenue similar to Q119 but the company is expecting potential near-term disruption in its medical division (~30% of revenue) for the duration of the pandemic (we assume 3-months). The self-checkout business (predominantly supermarkets) should continue to weather the storm (~70% of revenue) given the resilience we have seen in this sector thus far.  

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  • Shekel Brainweigh - CY19 Updated for Audited Accounts and COVID-19
    06 Apr 2020

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