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#Arbitrage play?
Added 4 days ago

Vortiv own 25% share in TSI India, an owner and operator of some 15000 or so ATMs in India.   TSI India generated $15M AUD in revenue, and $1.7M in profit.   

VOR have a valuation of around $9 million on the balance sheet for this investment, however, I don't think the share price reflects the value of this business. 

VOR are seeking to sell out their stake, and apparently the majority owner is looking to sell out as well.   If they can get $6 million or more for the business, It will understandably have an impact on the share price of a company with a market cap of $18 M.  

Given, VOR are on track to achieve at least $2M PBT this FY, and may benefit from a +$6M "windfall", it looks good value.   

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Added 3 days ago

Presentation by the CEO of VOR, Jeffery Lai on Coffee Microcap Morning Meeting on Thursday.  His presentation starts from around 30:20min.

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Last edited 6 months ago
  • Insider selling to fund tax liability
  • Funding earn out payments for CloudTen.
  • Loss of key personnel from acqusitions (Decipher Works Acq Aug 17 & CloudTen Acq Feb 19)

11 Dec 19:  Chair sells 13.3m shares ($124,877) to fund tax liability.  

16 Jul 19: Last 4C (1Q 20) was Operating CF was $777k largest so far.  Last 6 quarters have produced positive operating CF.  They no longer need the options to be exercised to fund the Cloudten acquisition considerably reducing the risks.

12 Jul 19: TSI, the Indian ATM business is valued at $15m (down to $9.7m @ FY 19). Although business conditions have been improving I would not rely on the valuation and there is a risk that the business is worth much less than this.

The Cloudten acquisition needs to be funded by options to be exercised in the future which is at risk if the share prices does not increase.

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#Bull Case
Last edited 6 months ago

11 Dec 19: Positive Free Cash Flow for last 7 quarters with Rev growing strongly - Decipher Works (25% p.a) and Cloudten (65% p.a.).

TSI (India) on the books for $9.7m.  If sold then EV is only $9m at 0.9c ($19m-9.7m).  Put it on FY20 EV/FCF of 5x.

16 Jul 19: 1Q20 4C operating cashflow of $777k.  >300% above the previous best.  Last 6 quarters have been operating cahflow positive.  Management are continuing to build a track record and credibility.

12 Jul 19:

  • Continuing to generate postive cashflow. 
  • Indian ATM business has returned to EBITDA profit. 

Changing business focus from the ATM business in India to Cybersecurity (DWX) and Cloud services (Cloudten).

DWX has been doing well with cashflow growing.

Cloudten has seen rapid revenue growth and looks like a good acquisition.

If they can sell the Indian ATM business at anything close to what it is on the books at ($15m) then TSN would be very undervalued.

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Last edited a week ago

27 Mar 20:  FY20E Rev $11.5m [FY19 $5.8m}; FY20E EBIT $1.3m [FY19 $0.22m}

11 Dec 19:-

FY20 Estimates (Personal based on past 3 years growth)

Decipher Works: Rev $5.5m (+25%); PBT $1.4m (+25%)

Cloudten: Rev $6.3m (+40%); PBT $2.1m (+40%)

Total: Rev $11.8m; PBT $3.5m

FY20 EV/EBITDA : 22/3.5 = 6.4x; With TSI Sales $12m/3.5 = 3.4x

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#Substantial Holders
Added 6 months ago

5 Dec 19: Chair - Foster sells 13.3m shares.  163m remaining (5.85%)

23 Sep 19  : Bombora and Regal Funds 249m shares @ 8.5c

Illwella Pty Ltd / Quentin Flannery 9.25% (227m) @ 8c

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#Director Transactions
Added a week ago

28 Feb 20: Lai (CEO) +7,000,000 for $48,125 @ 6.875 [9.94m] - from block sale by institutional investor

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