Stratech Group

[specuvestor]

^^ Agree that CP could just have quoted from his own post #2 #9, and yes the project value to Stratech is likely much lower

Steady state assumption when fixed costs have been covered.
taking reference from comparable software companies.

Let's do a more conservative approach.

30% of automated FOD market = 60 airports.
1 airport per annum = $10mil revenue
30% of this revenue goes to marketing agency
Hence 1 airport will earn $6.6mil revenue per year.

60 airports will earn $396 mil revenue per year. Let's take a 50% discount. 60 airports will net $200mil revenue per year.

NPM - let's assume to be just 20%.
We have net recurring profit = ~$40mil per year.

Assuming a P/E ratio of just 10, market cap should be around ~$400mil.

10 multi-baggers?

The market size for automated FOD (say) 2% of the total airports around the world.

There are ~ 10,000 big airports around the world (7000 commercial + 3000 military).

2% of 10,000 = 200 airports. Of these 200 airports, assume that iFerret corners the market by 30%, this will give 60 major airports.

Each airport contract size ~ $50mil over 5 years => $10mil of revenue per annum.

Assuming net profit margin of 50%, $5mil net profit per airport per year.

At steady state, 60 airports x $5mil net profit per year = $300mil net profit gain (recurring per annum)!!!!!!

Current market cap of Stratech is only ~ $36 mil
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Does the above make sense?

Why do you assume 50% net margin ? Their 1H 15 result net margin was 1.3%.

(Not Vested)

Your projections reminds me of another counter called Inter-Rollers now called Pteris

Projects are not recurring revenue nor profits