@Strawman, agreed. With MSL bringing in just under 25m of revenue last year, a minimum of 3.6m over a 5-year period isn’t exactly what I would call material. If no further income is received, the figure equates to around 700k per year.

That said -- and as you note -- this is great endorsement for MSL’s POS software and further business opportunities will likely arise. Queensland is arguably the biggest sporting hub in the country for international events (think Comm Games, Olympics etc) so to establish a contract with Stadiums Qld is pretty impressive.

Surprisingly, the announcement doesn’t allude to next year’s Women’s World Cup, scheduled to be held in Australia and NZ. Brisbane is one of the major host cities for the event, with Suncorp one of four principal stadiums. Suncorp Stadium will be used extensively throughout the event, and will also host the quarter finals and third place match. In fact, MSL have contracts with most of the main stadiums scheduled to be used throughout the event – eg Eden Park in Auckland and AAMI stadium in Melbourne. They are building quite the impressive customer base. 

I thought the recent trading update was decent enough, but I was a little more bearish than @wtsimis.

Relating to revenue, they have used the classic PCP comparison like many do (my biggest bugbear!) and not elected to compare vs H1 figures….I wonder why?  

Revenue in H2 was 16.9m. With MSL projecting between 32-33.5m, we aren’t seeing any revenue growth in the previous sixth-month period, despite the update citing new SwiftPOS sites and 68 new OrderMate venues in the APAC region alone.

Excluding the recent acquisition, organic growth appears to have stalled. They have announced many wins (above) yet this hasn’t shifted through to top line growth. Maybe they are seeing solid organic growth, but are losing customers through churn? Hard to know….but something to keep an eye on. It might be harsh, but I am marking this one down as an orange flag.

That said, the solid fundamentals still look appealing to me – a healthy cash balance that once again has increased, no debt and EBITDA more than doubling in the last reporting period.

Take the good with the bad – but I want to see evidence of organic growth in the next reporting period. 

Non-executive Director, Dr Richard Holzgrefe, acquired 46,671 shares on-market recently -- spending almost 9k. He already owns a heap of shares, so perhaps a strong signal that he considers the current share price attractive.

Disc: held

@Strawman, agreed. This is their 6th consecutive quarter achieving cashflow positive, in addition to having no debt and sufficient cash on hand. This is a good example of a business I want to be owning in the face of increasing interest rates and the market re-rating companies with lofty valuations. It is also not lost on me that I had another small buy order in the night before the trading update was released. DOH.

For the sake of being fair, lets exclude the OrderMate acquisition for a minute. MSL expect to announce H1 revenue growth of more than 25% pcp. In H1 FY21, MSL revenue was 11.6m (with 1.6m EBITDA after overheads). Based on this H1 FY22 has seen a revenue increase of around 3m – taking FY22 revenue to the region of 14m>. Positive cashflow has increased from 1.2m to 1.4m pcp (before govt subsidies). These metrics are all heading in the right direction. In a Straw a few months ago, I noted that one of the strengths I see in MSL is its capital light business model - CapEx costs have traditionally been incredibly low. Provided they keep staff costs under control (the CEO seems like a tidy capital manager, so no real concerns here atm), I think the business will continue to scale well. This has has been touched on by members in the past but I think its worth another mention: the company look well placed for significant operating leverage, particularly through their inhouse software where gross margins are much higher. Over the next 12 months I will continue to look for evidence that customers onboarded are directly contributing to their bottom line - this occurring should lead to a market re-rate.

All in all, this is a solid update that demonstrates MSL’s resilience, despite the difficult environment it has been forced to operate in. With a backlog of closed sales still to contribute to H2 FY22 figures, in addition to the continued relaxation of restrictions in most of MSL’s main markets, H2 will likely be another strong reporting period for the company. The company also included a cheeky mention of early interest from stadium customers in the US (via their partnership with Taubman Capital). Hopefully we see more traction in this market.

Disc: held 

(Props to management for providing two revenue figures – one accounting for OrderMate and the other with it excluded)

Great analysis of this one folks, particularly your research report several months ago @Noicewon11. I didn’t initially take a position, mainly given its sketchy past – I wanted to see a few more runs on the board.

I will say right from the word go; I am biased – I have been a huge Manchester City fan since I was a kid, so it is great to see them secure a 3-year contract with the club in FY21. Now I just need to get myself over to the UK so I can enjoy MSL’s POS solutions at the stadium!

The result today was a good one – not quite as strong as Q4 FY21, which I prefer as a comparison – but they have once again delivered positive cash flow for the 5^th consecutive quarter. Revenue growth went backwards when compared to Q4 FY21 (7.7m vs 8.1m), as did free cash flow (2m vs 0.5m), but there were still some solid wins within the reporting period. I also take it the additional revenue (from the recent acquisition) is not taken into account in Q1 figures, and will be added in Q2/H1?

I won’t touch too much on what I like here – others before me have done this excellently, so I don’t need to repeat it – but the short of it is I think this is a good fit for a small to medium size holding in my satellite portfolio, particularly with current economic conditions. MSL has a healthy balance sheet, is well placed to continue to deliver organic and acquisition growth over the next 24-36 months, and has achieved positive cash flow consistently over the last year. Their low churn provides insight into the quality of their offering.

Like many others, I also agree the recent acquisition was a tidy one by management - who appear driven, honest, and have shown to be solid managers of capital. What I think is most impressive is their consistent performance throughout a pandemic that hampered the very industry MSL serve. I am looking to take a small position in MSL in the weeks ahead and will likely add to the position following half year reporting, provided I continue to like what I see.