SLI Systems (SLI)

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.

Share price chart

Share chart

Stock data

Market cap.NZ$84.1m
Last closeNZ$1.390
High / Low (52 weeks)NZ$2.8 / NZ$1.4
Stock market listingNZSX
Forecast net cash (NZ$m)7.6
Forecast gearing ratio (%)N/A
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual(14.2)(26.8)(42.6)
Relative *(14.5)(26.5)(46.8)

* % Relative to local index

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Y/E Jun Revenue (NZ$m) EBITDA (NZ$m) PBT (NZ$m) EPS (fd) (c) P/E (x) P/CF (x)
2012A 15.7 0.4 0.2 0.1 1390.0 46.9
2013A 19.0 (1.4) (1.6) (2.9) N/A N/A
2014E 22.5 (6.5) (6.7) (11.8) N/A N/A
2015E 30.1 (4.0) (4.4) (7.6) N/A N/A

Last updated on 26/06/2014

Investment summary

SLI recently announced an increase in supported languages from seven to 14, which should help attract a higher number of larger, multinational customers. Given the usage-based revenue model, these customers typically generate incrementally material revenue and shorten the average payback period. In addition to this, SLI recently released Dynamic Product Banners, which automatically display merchandising banners next to related products. Both these announcements should strengthen SLI's market position and help it sustain its impressive 21% five-year revenue CAGR. The current share price is at a significant discount to our NZ$2.62 DCF valuation.

Last updated on 30/06/2014

Industry outlook

E-commerce site search is a growth market, thanks to the overall growth in e-commerce and the importance of effective search in converting website visits to sales. SLI System's cloud-based product minimises the initial set-up costs for its customers, resulting in a high ROI in a short time frame. Global e-commerce sales are expected to grow by 17% in FY13.

Last updated on 30/06/2014

Key management

Greg Cross, Chairman
Rod Garrett, CFO
Dr Shaun Ryan , CEO and Founder

Company address

78-106 Manchester Street
Christchurch 8011
New Zealand
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