Top member reports
Consensus community valuation
$2.49
Average Intrinsic Value
57.4%
Undervalued by
Active Member Straws
#Bull Case
Added 7 hours ago

With a forecast underlying EBITDA of $35-$37m with decent growth and likely to benefit from Corona virus i would expect the EV/EBITDA of ~18-20 which gives a mkt cap of ~750m or $2.22 as the current target. 

 

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#Financials
Added 7 hours ago

This is a hard one in terms of financials given all the acquisitons. The latest guidance they have is pro forma underlying EBITDA of $35-$37m - note this is still a measure they have come up with internally as excludes one off acq costs etc 

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#Business Model/Strategy
Added 7 hours ago

The company is in the telecommunications space having IPO'd in Feb 2019 with a plan to grow organically and by acq. 

2019 was a big year in this regard with 6 acqs and the share price going from 25c at IPO to $2. 

The acq have ranged from all cash to all share to a mix of both and as small as $450k to as large as $100m. 

2020 has been quiet on this from but to be expected given COVID as well as needing to bed down the 2019 acqs.

 

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#Bull Case
Last edited 6 months ago

I originally purchased based on the quality of the management team and their success in building M2 Telecomunications into a billion dollar company. They look to be doing the same with UWL, having made some great acquisitions over the past few months. 

The aquisitions they have made all seem to be growing by about 30% plus per annum. They are all good recurring revenue models and UWL have done a great job of incentivising previous management and owners to stay on and build the individual businesses. 

The business has $30m in cash and a further $60m available to borrow for other acquisitions that come up.

 

 

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#Management
Added 7 hours ago

Mgmt are ex M2/Vocus and looking to replicate that it seems.

Have skin in the game including Vaughn Bowen buying $2.5m on market in 2019 from prices ranging from 30c to $1.60.

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#Quarterly Reports
Last edited a month ago

23-Apr-2020:  Appendix 4C - Quarter ended 31 March 2020

At a glance (summary):

  • 217% increase in like-for-like (LFL) Net Operating Cash Flow on prior quarter  
  • 754% increase in Free Cash Flow on prior quarter
  • Free Cash Flow exceeds 72% of Net Operating Cashflow
  • Annualised run-rate EBITDA as at 31 March 2020 tracking above forecast
  • March 2020 quarter saw record net growth of FTTP connections in W&I division
  • Above-forecast quarterly performance in all three UWL business units (‘pillars’)
  • Cash reserves increased by 12% on prior quarter to $37.7m

23 April 2020: Uniti Group Limited (UWL) is pleased to provide an overview of its March 2020 quarter cash flow and cash position, as reflected in the Appendix 4C which accompanies this announcement [click on link above for that]. 
 
Highlights: 

  • Record positive Net Operating Cash Flow of $7.9M in the March quarter, a 217% increase on the prior quarter, on a like for like basis
  • Free Cash Flow (Net Operating Cash Flow less Capital Expenditure) of $5.7M, an increase of 754% on the prior quarter, illustrating the strong cash generation credentials of all three business units (or ‘pillars’).
  • Free Cash Flow increased to 72% of Net Operating Cashflow, up from 27% in the prior quarter, placing UWL amongst the strongest sector performers in terms of cash conversion.
  • Growth-related capital expenditure in the Wholesale & Infrastructure business unit was $2.2M, in line with forecasts, due to another active period of fibre network deployments and an amount of contingency infrastructure inventory purchasing, in light of COVID-19.  Pleasingly, no supply chain issues have arisen or are currently anticipated.
  • The strong operating performance of the Company during the period is evidenced by the March 2020 run-rate EBITDA (excluding one-off restructuring costs), annualised, tracking above internal forecasts which underpinned the upgraded FY20 EBITDA ‘run-rate’ guidance released on 17 February, which was upgraded again on 24 February and reaffirmed on 20 March 2020.  
  • All three UWL business units performed above forecast in all key financial performance metrics in the March quarter, including revenue, earnings and cash collections.
  • Increased levels of work-from-home, online learning and domestic internet consumption, due to restrictions associated with COVID-19, have strengthened underlying demand for the Company’s superfast fibre-to-the-premises (“FTTP”) services provided by its Wholesale and Infrastructure (“W&I”) business unit, delivering record net new FTTP connections in March 2020.
  • The Company ended the March quarter with $37.7M in cash, an increase of 12% over the prior quarter, providing further financial capacity to pursue its aggressive growth agenda, both organically and via strategic acquisitions. 

--- click on link above for more ---

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