SLI Systems (SLIZ)

Business description

SLI Systems' core products are e-commerce site search and navigation tools that learn from customer behaviours to improve the relevance of search results and therefore increase sales conversion.

Stock data

Market cap.NZ$19.3m
Last closeNZ$0.31
High / Low (52 weeks)NZ$0.9 / NZ$0.2
Stock market listingNZ
Forecast net cash (NZ$m)5.7
Forecast gearing ratio (%)N/A
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual29.2(6.1)(63.1)
Relative *25.8(10.9)(64.2)

* % Relative to local index

Other companies in sector Show

1Spatial 7digital Group
Acal accesso Technology Group
ADVA Optical Networking Advanced Computer Software Group
Advanced Micro Devices AIXTRON
Algomizer All for One Steeb AG
Allocate Software Allot Communications
Alpha and Omega Semiconductor Alphapoint Technology Inc
Amazon Amino Technologies
ANADIGICS Arria NLG
artec technologies AsiaCell
AT&S Austria Technologie & Systemtechnik Beta Systems
Blancco Technology Group blinkx
blur Group Brady
Bulletproof Group Carclo
Catapult Group International CENIT
Cerillion provides billing, charging and customer management software, primarily to telecommunicatio CityFibre Infrastructure Holdings
Cliq Digital CML Microsystems
CoAssets Comptel
Craneware CREALOGIX
Cypress Semiconductor DATAGROUP
DDD Group Dillistone Group
door2door dotDigital
DSP Group e2v technologies
Eagle Eye Eckoh
Elmos Semiconductor EMIS Group
Emulex Endace
EnWave Corporation eServGlobal
Esker Evolving Systems
EVR Holdings PLC Expert System
Facebook Featurespace
FFastFill Fintech Group
First Derivatives First Sensor
Focus Solutions Group Foresight Autonomous Holdings
FreeAgent Freelancer
Fusionex International Gamma Communications
GB Group GBST Holdings
GeoOp GFT
Globo GO internet
Himax Technologies Hrvatski Telekom
ifa systems ikeGPS Group
Infinera Inmarsat
Innovation Group InVision
IQE IS Solutions
ISRA VISION IXYS
Jenoptik K3 Business Technology
Kainos Kalibrate Technologies
Keywords Studios Learning Technologies Group
LRAD Corporation Magix
Manpower Software Manx Telecom
Manz Maxima Holdings
Medicsight Mensch und Maschine Software SE
Mercia Technologies Micro Focus International
Micron Technology Migme
Mobile ecosystems Monitise
Montage Technology Morse
mVISE My Net Fone
Nano Dimension Nanoco Group
nearmap Nemetschek
Netcall NetDimensions
Netflix Nexus Management
O2Micro International OMG
OmniVision Technologies Orion Health Group
Osirium Technologies Outsourcery
Panorama Synergy Pantaleon Entertainment
Patsystems Paysafe Group
Pebble Beach Systems Group Pericom Semiconductor
Phitek Piteco
PLX Technology Pointer Telocation
Pricer Prodware
PSI Pure Wafer
QSC Real Estate Investar Group
REALTECH Redflex Holdings
Redstone Reed Elsevier
Reply SpA Results.com
Rex Bionics Rheinmetall
RM S&T
SCISYS Secunet
Seeing Machines Sepura
Serko Seven Principles
Siemens Sigma Designs
Silicom Silicon Image
SimiGon SinnerSchrader
SITO Mobile Smartpay Holdings
SNP Schneider-Neureither & Partner Software AG
Solera Spansion
Spirent Communications SQS Software Quality Systems AG
Stadium Group StatPro Group
Store Electronic Systems Straker Translations
SuperCom Synchronica
Taptica Technology sector
TerraNet Texas Instruments
The Marketing Group The Naga Group
Thin Film Electronics Thoughtonomy
Tikit Group Toumaz
Track Group TXT e-solutions
TZ Limited Ubisense Group
UMT United Mobility Technology United Power Technology
VASCO Data Security Vectron Systems
Virtual Piggy Vista Group International
Vitec Vizrt
VMob Group WANdisco
Webinar Wincor Nixdorf
WorkPlace Systems International XP Power
Xploite Xplore Technologies Corp
YuuZoo
Y/E Jun Revenue (NZ$m) EBITDA (NZ$m) PBT (NZ$m) EPS (c) P/E (x) P/CF (x)
2015A 28.6 (6.7) (7.0) (11.1) N/A N/A
2016A 35.7 1.1 0.7 1.1 28.2 25.6
2017E 32.3 (0.5) (0.8) (1.3) N/A N/A
2018E 34.7 0.9 0.5 1.0 31.0 N/A

Last updated on 19/07/2017

Investment summary

SLI’s financial performance in H1 reflected its current transitional phase with ARR remaining flat as the business is realigned to focus on value over volume through a number of initiatives. The key customer retention rate is reverting to historical levels and with an operationally geared model, we believe that only a modest recovery in new business momentum should support robust upside. Net cash stands at NZ$6m. At 0.5x EV/Sales, SLI is trading at an acute recovery rating and a substantial discount to search/SaaS peers (typically 2x+). However, any recovery momentum should drive operationally geared growth in profitability and a re-rating upwards. Our DCF scenario analysis suggests that sustaining 5% growth in the mid-term should generate upside, while 7.5% mid-term growth and 20% EBITDA margins result in a DCF valuation of NZ$0.77, twice the current share price.

Last updated on 03/08/2017

Industry outlook

The global retail e-commerce market is estimated to be $3.6tn by 2019, growing at c 16% CAGR from $1.7tn in 2017, indicating increasing demand for SLI’s product suite. SLI estimates its global market opportunity at $1.7bn. The competitive landscape is crowded, however, with direct competition, e-commerce platforms and in-house solutions in the competitive mix.

Last updated on 03/08/2017

Key management

Greg Cross, Chairman
Chris Brennan, CEO
Rod Garrett, CFO

Company address

78-106 Manchester Street
Christchurch 8011
New Zealand
View website