Janison operate;

·         Online learning system

·         A LMS system for businesses

·         They are have moved into the digitization of exams for high schools and higher education

Target market

·         Targeting a $150m business

·         OECD Contract signed for Brazil, Russia and US

·         Workplace learning is going flat

·         Last year Janison bought a company that runs exams for Australian uni's to start digitising the exams

·         Higher education revenue increased last year 45% (from annual report)

Competitors/threats

·         4 all are large businesses

·         I did a google search and couldn’t find anything significant, a few sites, and an old article from 2015 saying Norway was researching digital exams. The first site that came up was the advertisement for Janison

·         Operating in countries like Brazil and Russia can leave the revenue open to forex risk.

Does it have a competitive advantage /  what Is the competitive advantage?

·         Possible first mover advantage

·         Regulatory advantage in that it has satisfied the government and OECD standards putting up barriers to entry.

Who has skin in the game?

·         Wayne Houlden is commercial director and company founder

·         CEO Tom Richardson has been there for 5 years and has money invested in the company

·         The incentive structure for upper management has just changed from EBITDA to a share price/revenue model which they are implementing in 2020

·         51.44% owned by diptoe pty.ltd (Wayne Houlden)

·         19.57% owned by Tentickles Pty Ltd (Wayne Houlden and his wife)

·         The rest are banks/institution owners

·         Not sure if CMC has their figures wrong or if I am missing something as it says diptoe and tentickles both own 33,033,708 each, which does not equal the percent displayed at 51.44 and 19.57?

Data source

2019 Annual report

They only acquired the exam company on 16/9/19 so the aquisition has not been accounted in the annual report data.

Balance Sheet

Cash = 6,025,000

Total equity = 25207000

Profit and Loss

EBITDA 231,000

Loss of 1,283,000

Depreciation doubled, so did interest expense

Trading EBITDA excludes the impact of non-trading items

Trading EBITDA 2018 = 3,177,000

Trading EBITDA 2019 = 1,987,000

Therefore trading EBITDA is enough to cover the net loss from last year, the loss was due to financing and trading activities.

Gross profit

2018 = 6 680 000

2019 = 7 887 000

Net loss per share = 0.88c

Cashflow

Revenue increased 30% last year

Will it require funding?

Depends on the expenditure after the acquisition, but should not given that they trading EBITDA is more than the net loss, so in theory they should be able to scale back investment if required. Also they have cash to fund this loss rate for at least 4 years.

What is the upper managements remuneration as a portion of revenue? Is there any large dilutive options/rights issues?

350k for the CEO, 280K for CFO, 150k for the other two.

Total outstanding rights/options 13,440,840 shares

Outstanding shares 181,000,000

Market cap 64mil

What phase is the business in?

Cash positive but spending money on expansion. A little hard to tell after the acquisition.