Took the opportunity to top up stock today at 64c.
Although the price of the capital raise (60c) and the dilution it is representing (SOI increase from 78.6m to 100m or 27%) is not what i would be attracted to but I can understand the purpose.
SomnoMed future sits with Rest Assure.
This is not new and well understood and was instrumental to drove the valuation to just shy of 200m market capitalisation in November 2021.
As it currently sits the MC is 62.9m prior to capital raise.
It may be that concerns are well and truly baked into the share price and time will tell if this proves to be a great opportunity.
Why i topped up ?
Overall the for me the thesis is still in check although there are concerns to keep a watch on including :
- competition impacting growth and
- the Rest Assure roll out not gaining traction across the globe.
Revenue year on year has risen since 2014 ( 26m 2014 to 83m 2023) and EBITDA remains positive across the past 5yrs.
Looking forward management are targeting 12% revenue growth in 2024 which is on track as stated in the market update last week.
More broadly management are targeting 20% CAGR with 10% EBITDA in 2027.
If this was to occur we would see revenue reach approximately 160m and EBITDA 16m.
This may be a stretch as we currently stand but if this was to transpire or to the mid point I believe current SP and pessimism would reflect good value.
Interested to know other's views in current developments.
Disc: Hold in RL and SM