Straws are discrete research notes that relate to a particular aspect of the company. Grouped under #hashtags, they are ranked by votes.
A good Straw offers a clear and concise perspective on the company and its prospects.
Please visit the forums tab for general discussion.
Pleasantly suprised to see todays little SDR pop. Technically, it looks like it broke out upwards quite decisively from a nice textbook horizontal flag consolidation in the past week. Theory has it that it "should continue" in the direction of the breakout.
~$7.03 looks like the next resistance zone, this being the 2nd highest peak on 30 Dec 2021 since SDR listed on 8 Nov 2021. This also coincidentally happens to be in the zone of the uptrend line resistance from the low of 28 Jun 23. Might thus be a a bit of a struggle to go past $7.00. Suspect it will bounce between ~$6.50 and ~$7.00 for a bit, which for the longer term, is a healthy thing to have happen.
Price is also not too far from SDR's all-time high was $7.77 on 9 Nov 2021, after which we will be in completely price uncharted waters ...
The next business update will be likely Jan 2025 when 1H results are announced as SDR no longer reports quarterly. Time will tell whether what is poured on this price fire from those results is kero or water!
Discl: Held IRL and in SM
SUMMARY
A very good all round operational result - very hard to find fault with it as the business appears to have fired on all CURRENT cylinders.
Smart Platform new capabilities are being progressively rolled out in 1HFY25 - sets the foundation for a good step up in revenue in 2HFY2025.
Focus is now increasing on larger hotel properties vs SDR’s earlier focus on small hotel properties - this opens up the TAM, is a good sign of growing product/platform confidence and will support future revenue momentum given the higher Gross Booking Value of larger hotels
Am very bullish as things are falling into place very nicely.
Thesis of SDR being the dominant platform in small and medium-sized hotels is very much intact and in play with the existing capabilities, and with the promise of more from the imminent Smart Platform capability rollout.
Market does not seem to have recognised this and prices have fallen to my top up zone of ~$4.90
Topped up today at $4.92 IRL and in SM, with dry powder kept on standby to further top up around $4.60, if prices fall to those levels.
Disc: Held IRL and in SM, High Conviction holding
Financials (all amounts and %’s are YoY comparisons)
Total revenue up 26.0% to $190.7m - while this is shy of SDR’s “medium term” goal of ~30% annual organic growth, it has grown at a fast clip and is before new Smart Platform capabilities are released.
Margins have been sustained:
Underlying EBITDA turned positive from FY23 ($21.9m) to FY24 $0.9m, importantly, this occurred in 2HFY24, reflecting the benefits of operating leverage and cost discipline
LTV/CAC continues to improve on a steep trajectory - 31.7% improvement from 4.1x to 5.4x
Rule of 40 performance improved 230%, from 5 to 17, reaching 21 in 2H
Operating leverage is kicking in as revenue increases - this is very evident in falling product Development Cost despite the intense focus on developing and deploying the new Smart Platform capabilities in the back half of FY2023.
Balance Sheet
Underlying FCF improved from ($34.0m to ($6.4m)
$72.3m in available funds, which includes $30.0m of undrawn debt facilities
3-Pillar Smart Platform Strategy
Clear evidence that the SDR platforms are being actively used
The industry is coming onboard, including the big Global Distributors
New capabilities appear on track for rollout in 1HFY25 - expect revenue to get a good leg up in 2HFY25 as a result
My notes on SDR's Appendix 4C and Trading Update today. I really like how things are panning out not only for FY24, but also what is ahead for FY25 ...
Disc: Held IRL and in SM
TAKEAWAYS
Summary of the Updates on Key Metrics
SMART PLATFORM STRATEGY
Dynamic Revenue Plus
Channels Plus
Smart Distribution Program - Newly Announced
TRANSACTION PRODUCT INITIATIVES
Payment Solution
Metaseach Manager
GUIDANCE
Good to know Aust Super is accumulating SDR, adding another 1%.
Following the post on SDR's 1HFY24 results earlier, here is the summary of the SDR 3QFY24 Appendix 4C. More of the same from 1HFY24 ...
Very excited with progress on the 2 new capabilities currently in pilot release ahead of 1QFY25 release as this will propel SDR's next phase of growth, in parallel to the ongoing growth in the current base products.
Discl: Held IRL and in SM
KEY POINTS FROM THE ANNOUNCEMENT
Belatedly worked through SDR's 1HFY24 results and last week's 3QFY24 Appendix 4C after leaving it aside for about 6M.
The FY2024 slides is an easy read and tells the story very clearly SDR 1HFY24 Preso
Added notes taken during the 1HFY2024 call and a summary of the P&L and KPI's across the halfs, so that I can more clearly see the trend across half's rather than pcp.
SUMMARY
KEY POINTS FROM 1HFY24 INVESTOR CALL
Discl: Held IRL and in SM
Went through the SDR Investor Day Presentation slide pack released yesterday 16 Oct 2023:
https://www.asx.com.au/markets/company/SDR
It was well worth spending the 25-30 mins working through the 78 slides to get a flavour of the 2 Smart Patform offerings targetted to be released in FY24 and the opportunity ahead to upsell within existing customers, over and above the signing up of new hotels.
Having had some past exposure to cruise ship revenue management and reservation systems, the offerings make complete sense to me. It solves some big problems, especially for smaller hotels that do not have extensive distribution and revenue management capabilities.
Very keen to see how the SDR customer base takes up these new offerings and the resultant financial impact in the coming Q's.
SUMMARY
Discl: Held IRL and in SM.
SDR's FY23 results had no surprises as most of it was revealed during the earlier 4Q Appendix 4C Release. However, these charts in the pack stood out for me as it provided a bit more "colour" on the performance.
It was a strong result and it is executing/delivering on the trajectory Sankar said it would. Will be interesting to see how much this holds up in the next 2Q's as global economies decelerate further, eating into discretionary travel demand.
Discl: Held IRL and in SM.
These are my notes from viewing the video on the Sankar Narayan chat from 3 June 2022, earlier this week. Nothing new for those who follow SDR but it was quite a revelation for me and I bought into SDR that same day. I have some prior (dated!) cruise ship hotel and reservation system experience, so the solution and the need it is trying to address makes sound sense. Very comfy with Sankar running the ship and his approach/thinking. He clearly has skin in the game, and showed during the chat that he is similarly hurting from the share price fall ... If it can get through Covid, it can get through anything really.
Discl: Hold SDR IRL and SM. Will be further topping up if it dips further towards $3 as this feels like a really good entry point for a well-run business with many ways to win.
OVERVIEW OF BUSINESS
ADDRESSABLE MARKET
TECHNOLOGY OFFERING
GLOBAL DISTRIBUTION FOOTPRINT
REVENUE BREAKDOWN
MULTIPLE OPPORTUNITIES FOR GROWTH
COMPETITIVE LANDSCAPE
STRONG FOCUS ON COST OF ACQUIRING CUSTOMER
RESILIENCE OF BUSINESS & UNDERLYING ECONOMIC MODEL
BAILADOR RELATIONSHIP
APPROACH TO GROWTH
THOUGHTS ON MACRO ISSUES AND IMPACT ON SDR
WHAT KEEPS SANKAR AWAKE AT NIGHT
WHAT DOES THE MARKET MISUNDERSTAND OF SDR
INVESTMENT THESIS
KEY RISKS
Post a valuation or endorse another member's valuation.