New acquisition is a gamechanger. Got in today at 175 and holding strong. Venue data is going to continue to grow, america is opening up, strong contracts in place, revnue growing. Target price 60c in 2 years.
SKF acquires CrowdVision, US and UK based AI, computer vision and video analytics company focused on airports, stadiums, transportation hubs and large-scale resort hotels and casinos.
CY20 Rev of US$3.1m and ARR of US$1.7m. EV US$7-8m. CY20 EV/ARR multiple of approx. 4.1-4.7x. Up front cash US$1.0m. Deferred consideration of US$6-7m payable 3 months following completion payable with a mix of cash and/or SKF shares at SKF’s election. SKF shares to be issued at no less than $0.20. Founded 2009. 28 employees. 35+ customers. 13 out of top 30 airports under contract.
Capital raising: $10m @ $0.165 [60.61m shares] 19.6% disc to 5 day VWAP. SPP of $1m. Canaccord Genuity (Australia) and Bell Potter acted as joint lead managers.
The CY20 EV/ARR multiple of under 5x is not high. But the business is not profitable and SKF will have to fund the business so it is likely to be running at a NPAT and cashflow loss.
Skyfii delivers 104% growth in operating EBITDA
H FY21 Financial Highlights
DISC: I hold
--- click on the link above for the full CG report on SKF ---
[I do not hold SKF shares.]
1/4ly Report Q2 2021 & Conference Call
*Operating Rev $ 4M ~ Up 15% (v Q12021)
*Recurring Revenues $2.8M ~ Up 25%
*ARR ~ $11.5M ( Annual Recurring Revenue (ARR) based on contracted recurring revenues as at the end of Q1 FY21 - inclusive of temporary suspensions as a result of COVID-19 & contracted revenues from the acquisition of Blix announced 16th September 2020)
*Cash at Bank 3.4M (at 31/12/2020) ~ up 27%
*Debt Facility $2M ~ $1.5M undrawn
Disc: I hold
Although I remain bullish on this company, there are a couple of things to keep in mind.
- $982,000 of their non-recurring revenue was a government grant for R&D.
This means that although total revenue looks like pre-covid levels, I doubt the same government incentive will happen this year. This also indicates that there was a severe decline in customer non-recurring revenue from the previous quarter.
- The light at the end of the tunnel is that recurring-revenue had a significant increase from the prior quarter, indicating the high 'stickiness' of SKF's products. The trouble seems to be around acquiring new customers, hopefully, they can ramp up their marketing to attract a larger market share.
Skyfii delivers 25% growth in Recurring Revenues as demand for people counting technology grows
? Recurring Revenues for Q2 FY21 of $2.8m, up 25% vs Q1 FY21 (inclusive of the Blix acquisition)
? Total Operating Revenues for Q2 FY21 of $4.0m, up 15% on the prior quarter (Q1 FY21)
? 1H FY21 Operating EBITDA of $1.5m, representing a 13% increase when compared to 2H FY20
? Annualised Recurring Revenue (ARR) exited Q2 FY21 at $11.5m
? Total Cash Receipts of $3.4m, up 10% on Q2 FY20
? Cash at bank of $3.4m (as at 31st December 2020) up 27% on Q1 FY21, with additional access to a $2m loan facility, of which $1.5m remains undrawn
? Blix acquisition, completed 14th September 2020, has delivered new business wins with Asics, Good Feet & Jo Mercer retail apparel brands
? Strategic partnership with Boingo delivered a five year deal with Metro Washington Airports Authority (USA)
? Strong North America growth securing new contracts with Omaha Zoo, Retail Business Services, Mark Anthony Group & Trent University
? Strong customer retention with key renewals completed with David Jones (AU), The Kooples (FRA), McArthurGlen Retail Outlets (UK), SFMOMA (USA); JCPM Group (BZL), Nuffield Health (UK); AB Nordiska Kompaniet (EU)
DISC : I hold in RW & Strawman
SkyFii uses cloud, mobile technology and Wi-Fi systems which enable bricks-and-mortar venues to become more competitive by better understanding the needs of their diverse types of visitors. Skyfii operates both domestically and internationally (35 different countries).
Although revenue was hit hard during the last quarter of FY20 because of Covid, they have seen a strong rebound in FY21 with many new contract wins during this time.
The Wi-Fi analytics market was valued at USD 4.28 billion in 2019, and it is expected to reach USD 18.96 billion by 2025. I believe 2020 has emphasised this growth, highlighting the importance of people tracking and venue occupancy monitoring. Skyfii is not profitable yet but is forecasted to break even in 2022, potentially being a major player in the wifi analytics market globally. In FY20 Skyfii achieved a 142% operating EBITDA growth and 44% in total revenue growth from the previous year.
Skyfii recently acquired Blix and Beonic Technologies which have given them considerable market share in the automotive and retail property industries, including over 300 blue-chip companies.
I see 2 major risks, the first being that it is a highly competitive industry with no major players, the second being potential government regulation around privacy etc.
Rating: BUY (unchanged), Price Target: A$0.30 (unchanged), Share Price: A$0.20
Tuck-in acquisition of Blix ($1m ARR), and return to pre-COVID growth (>+10% qoq revg)
--- click on link above for more ---
Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (TSX: CF) The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all the companies and securities that are the subject of this report discussed herein.
4Q20 4C Update: Reasonable result considering the impact of COVID. Cash Receipts grew +33% in FY20. ARR $10m so is trading at around 5x ARR.
Rolling out OccupancyNow a new product which helps count and limit the number of shoppers.
Link to today's Investor Briefing:- https://skyfii.io/wp-content/uploads/2020/07/Q4-FY2020-Quarterly-Conference-Call.mp3
Cash Receipts $2.97m (+33% yoy) though down on 3Q20.
Debt: $0.1m [$1.9m undrawn]
FY20: Operating Revenue $13.5m (+44%)
Operating EBITDA $2m (+129%)