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Growth Portfolio: Bulletproof Group Ltd (ASX: BPF)

Published 30-SEP-2015 00:00 A.M.


1 minute read

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Overview: Bulletproof Group Ltd ("Bulletproof", "the Company") is an Australian software company providing end-to-end and managed cloud services to business and government customers. Customers are billed upfront for consulting and implementation and then charged on an ongoing basis for hosting and management. Bulletproof listed on the ASX in January 2014 via a reverse takeover of Spencer Resources Limited.

Catalysts: Since the reverse takeover, Bulletproof has recorded accelerating revenue. During FY15 Revenue has increased 59%, while operating cash flow has improved 53% y-o-y. Approximately 75% of its revenue is of recurring nature providing somewhat income stability. The $3.5m acquisition of Infoplex Pty Ltd is expected to be FY16 earnings accretive and generate in excess of $2m EBITDA annually. Management has a favourable track record in the internet and software industry and is major shareholders in the Company.

Hurdles: Bulletproof’s acquisition strategy creates integration and funding risks. There is no guarantee that new businesses will generate sufficient earnings to justify the investment. Additional capital raisings and further dilution of shareholders are the primary risks.

Investment View: Bulletproof provides profitable exposure to the managed cloud service industry. Integration of acquisitions and further capital raisings are the primary risks. However, accelerating revenue and earnings are near-term drivers. With management's proven track record in the industry, we initiate coverage with a ‘buy’ recommendation.


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

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