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$70.2m
Last closeNZ$1.15
High / Low (52 weeks)NZ$2.4 / NZ$1.0
Stock market listingNZ
Forecast net cash (NZ$m)5.4
Forecast gearing ratio (%)N/A
TeamTechnology
SectorTechnology

Price performance

%1m3m12m
Actual(5.7)0.0(52.1)
Relative *(4.9)(4)(56.1)

* % 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)
2013A 19.0 (1.4) (1.6) (2.9) N/A N/A
2014A 22.4 (5.4) (5.4) (8.6) N/A N/A
2015E 29.2 (5.3) (5.7) (9.3) N/A N/A
2016E 37.8 (3.8) (4.2) (6.9) N/A N/A

Last updated on 10/03/2015

Investment summary

SLI had another strong half with annualised recurring revenue (ARR) growing by 34% y-o-y (28% constant currency) to NZ$28.9m and operating revenue growing by 26%. Importantly, retention rate and gross margin have also remained stable at 90% and 75% respectively. Growth was broadly spread across geographies, which reflects the global opportunity. We have slightly lowered (by 3%) our revenue estimates and gross margins (75% vs 77%) since our last published forecasts. Due to the high operating leverage this results in FY15e loss before tax increasing by 26%, but we remain optimistic about the long-term outlook.

Last updated on 10/03/2015

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 Systems' 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 20.2% in FY14.

Last updated on 02/03/2015

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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