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.

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Stock data

Market cap.NZ$114.7m
Last closeNZ$1.900
High / Low (52 weeks)NZ$2.8 / NZ$1.6
Stock market listingNZSX
Forecast net cash (NZ$m)7.6
Forecast gearing ratio (%)N/A

Price performance

Relative *(20.9)(30.6)N/A

* % 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 1900.0 64.1
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 25/03/2014

Investment summary

SLI's interim results at the end of February showed revenue and annualised recurring revenue in line with management's expectations at NZ$10.6m and $21.6m respectively. Growth is expected to accelerate in H2 as newly hired sales staff become productive. International growth (particularly in Brazil), new product introductions (such as Learning Recommendations, which was announced in February) and the retiring of Google Commerce Search at the end of March could also contribute to higher growth in H2. Our DCF valuation, on conservative growth forecasts, a WACC of 12% and a terminal growth rate of 2% produces a valuation of NZ$2.62/share.

Last updated on 31/03/2014

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 31/03/2014

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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