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$28m
Last closeNZ$0.45
High / Low (52 weeks)NZ$1.2 / NZ$0.4
Stock market listingNZ
Forecast net debt (m)N/A
Forecast gearing ratio (%)N/A
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual12.512.5(41.6)
Relative *8.411.9(47.2)

* % Relative to local index

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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 40.9 37.1
2017E N/A N/A N/A N/A N/A N/A
2018E N/A N/A N/A N/A N/A N/A

Last updated on 12/12/2016

Investment summary

While ARR growth has been slowing, the loss of three top ten customers - two due to insolvencies and one due to a takeover - severely dented this key metric in FY16 and confidence in the stock. However, we do believe that SLI has the raw material for a robust recovery. CEO, Chris Brennan is putting in place the people, processes and structures to drive the business long term. SLI is the market leader in a large and growing market, customer ROI is strong and the company has the portfolio to double revenues from its existing customer base. These changes will take time to embed however, so it is likely to be H217 before we see a return to robust ARR growth. Our estimates are currently under review.

Last updated on 21/12/2016

Industry outlook

The global e-commerce market is estimated at $2bn growing at c 12% y-o-y. 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 21/12/2016

Key management

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

Company address

78-106 Manchester Street
Christchurch 8011
New Zealand
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