It was an interesting chat with Stephen, and he seemed to have a good take on things (or at least a take that aligns with my view on things which may or may not be a good sign! lol).
The first half hit with the contract dispute, combined with a general bearishness towards anything tech or growth has seen the share price take a big hit.. its effectively been cut in half over the last year. But overall you are still seeing a company that is growing well (and not only because of acquisitions, or so it seems).
EBITDA will be flat this year due to that contract termination issue, which was basically a public sector client refusing to pay a massive pile of work in progress, but revenue should still be around 20% higher. And Stephen seemed confident they will recover that money through the dispute process, and they have already put in strict WIP caps for government work to make sure it does not happen again. Anyway, it strikes me as a bit of bad luck as opposed to any structural issues with the business. And something that some of the peers also had to deal with.
The AI stuff is obviuously a big part of this story, but it seemed so in a somewhat grounded way. I dont doubt its driving good demand for their data business because, as he put it, you need your data estate in order before you can do anything useful. And as a company they seem to be leaning into it in a practical way. It is not just about the hype but about resource flex. And he made a great point that coding is no longer the bottleneck for creativity, but the real shortfall now is in software architecture and just general creativity. It was an interesting point.
It also made sense how they are building up banks of repeatable IP and products like Scholarion, which lets them solve a problem once for a client and then sell that same solution to others in the same industry.
More broadly, it was also interesting to see how they continue to evolve and think about the type of work they do, with a focus on reputation and not on trying to be the cheapest. He mentioned winning partner of the year in China despite being far more expensive than local options because clients prioritise trust and mind share when the stakes are this high.
The share count has grown a lot over the years, and despite a current buy back, it is likely to keep growing as they bolt on more and more businesses, so that will peel off some of the growth in the broader figures. But we are probably looking at a FY26 NPAT of $8-10m, which represents a PE of around 18x or so, which does not seem too demanding if they can return to anything close to their historic rate of growth.
As always, the "if" is doing a lot of heavy lifting in that sentence. But, at first glance, the growth prospects certainly seem plausible.
Anyway, here is the transcript: Attura Transcript.pdf