Pinned straw:
Clearly the key binary event for CXZ coming up is whether their GM contract is renewed (due mid/late this year). I note this excerpt below from their release today.
a) this is not nothing if it ends up coming off - probably 10-15% revenue increase which will mostly drop to bottom line but, regardless, b) is this the type of thing GM would commission them to do if they are intending to move to a new software provider this year?
If you think the contract will be renewed then you have a vehicle with around $10m in cash/investments and long runway of earning a steady A$3m+ NPAT (with growth options albeit patchy ones). All for $21m.
Thanks @MicrocapJesus for the coverage .
Agree promising to see Connexion branch out to GM Canada through a pilot of OnTrac and although no guarantee they will land the opportunity it does two things
- Provide another market outside US GM and
- Adds to the prospect of securing a new long term deal with GM US
Q2 was another solid quarter overall without shooting the lights out.
Headcount reduction in the sales team from 3 to 1 in addition to share repurchases of 13.2m in Q2 saw EPS grow 19% to 0.0073c on previous quarter and 17.24% from a year ago.
EPS at end of Q2 is 0.027 putting Connexion on a PE multiple of just over 10 on a trialling basis.
Remain positive on the stock and the leadership with much upside with no debt and 6.7m cash .
Key risk as previously called out is the diversification away from GM US. The sales cycles are much longer than what is desirable however investment arm is moving steadily upward in terms of its contribution to the earnings and reflects Aaryn's background .
Disc : Holder IRL and SM