Janison Education Group Limited

ASX:JAN

Janison Education Group Limited

ASX:JAN
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$0.230 (0%)
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#383
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6
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Reports (7) My Report Forum Investors
Forum Topics JAN JAN Janison Education Group Ltd General Discussion
Wini
Added 3 years ago

@elpaso96

To your comment: "Management really messed up with their revised strategy and spent too much. I actually do not mind the company using R&D to improve the product or even create new products. It is the best use of capital. However, acquiring assets with payback period greater than 3 years made no sense (especially the AAS acquisition). Also, just personnel changes in the company where they hired directors with no incentive to grow shareholder value was really annoying. They were basically given stock options for getting a job..."

It is worth noting that multiple acquisitions and large share based compensation packages are a common theme across businesses brought to market and influenced by Bombora Investment Management. Mike Hill (MD of Bombora) is the JAN Chair and fellow director Brett Chenoweth also has ties to Bombora. It is neither an absolute good or bad thing, but whenever I see them on company boards, I usually assume the business will be acquisitive and always mindful that SBC will be on-going.

38
elpaso96
Added 3 years ago

I understand where you are coming from regarding the SBC, but that was a lot of money. Yes, they got 218 customers so that they can cross-sell exams but going after parents is a bold strategy. Also, paying 3x revenues for a 47-year-old business doesn't sit well financially despite the customers having, on average 11-year tenure. They did not justify how many in the 218 schools also conducted the PBTS exam. I think they miscalculated. Goodwill will grow. In saying that, let's see if they can get the synergy right and maybe even increase the price of the tests.

15
elpaso96
Added 4 years ago

Good to get validation from many members. Still maintaining my valuation, The valuation does not consider revenue bouncing back from JEM since the country is reoppening.

They have soo much optionality it's crazy. Let's watch the execution.

Another solid acquisition with a key target -> To win the digital contract for the HSC/VCE exam from NSW Department Education and Victoria Education. It's quite obvious that's the plan as they digitised NAPLAN and now will digitise the HSC exam.


19
lankypom
Added 4 years ago

Moderately interesting Stockhead Interview with Wayne Houlden, vice chairman and founder of Janison (ASX:JAN), Adam Brimo, group CEO and founder of OpenLearning (ASX:OLL) and Robert Graham, managing director and founder of Schrole Group (ASX:SCL).

General consensus is that Covid has brought forward investments in EdTech just like it has for eCommerce. Worth a listen for views about the market size and competition.

13
Solvetheriddle
Added 4 years ago

Hi elpaso

i see you are a fan of JAN. has the quesiotn below about recompeting for the ct in 2024 been resolved.

looks like a big Q to me - lose or pay away excess returns are the bear case obviously. big valaution impacts 

 

thnaks for your reply

9
elpaso96
Added 4 years ago

Doubt they would lose the bid. However, if they did lose to another provder, that's $30M+ forward revenues down the drain. They are tight lipped on the contract. It's 2 years away and I am not worried at this stage. Also, if they knew the outcome, why would they share without informing the market first?  

My reason why they would not lose the bid is that OECD have plans to use digital provders for more exams outside of PISA. I would follow OECD Education. I know they are in discussions for more tenders not disclosed to the market. I did not include in the valuation as it is too speculative and high chance they could lose the bid for new tenders. 

By 2024, more countries would be added and test volumes per division (NSP and IPP) would grow. Need to do scenario analysis on all bad outcomes as I have covered only the good ones. 

The big bad outcome would be business development cost or G&A cost outpacing revenue growth. If someone can help me dissect how they accrue $5.2M in "Business Development operating expense" that would alter my valuation. No explanation of what it is or why it grew a lot. I think it is another term for R&D or product development cost but I don't know. Business can mean anything. It could even be hired consultants.  

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