Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Equity Bottom-Up

Zulu Warriors - time to advance on SIQ
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Smartgroup Corporation Ltd (SIQ) a Salary Packaging and Novated Lease Services Provider appeared on our Zulu Warriors screen in June 2018, after a search of the Asia Pacific Small-Mid Cap universe for stocks exhibiting Growth at a Reasonable Price. Post the group’s positive half-year results, we feel a key milestone to decide on the worthiness of its investment case has been passed and it is now time advance on the stock.</li>
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We believe SIQ is well placed to deliver Growth via two strategies – natural growth and acquisition. The natural growth is expected from the existing client base adopting new services that the group delivers. Moreover, cost savings from an ongoing integration of the technology platform and “buying” power of the group from suppliers should allow for returns to be maintained and enhanced. Furthermore, operating in a fragmented industry and having a competitive balance sheet means the company is well placed to be a consolidator in the Australian and potentially international markets. 
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<li>
Implied growth multiples, strong cash flow and healthy returns should support a A$16.70 fair value. The group has delivered 55% EPS growth and maintained a healthy margin and ROE of 15% over the last 5-years and looks well placed to post c22%% in the next 3-years. We anticipate that as the asset base consolidates, investors should see improved capital efficiency helping to maintain a healthy dividend payout ratio.</li>
<li>
A positive bias towards SIQ as the company looks to act as one of the key consolidators of a fragmented market, as well as delivering returns through improvement of processes across its asset base. We expect to see continued acquisition announcements in the coming periods. At 1x consensus PEG, we see SIQ as an attractive addition to the portfolio for investors looking for exposure to Australia’s Small-Mid Cap market.</li>
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Zulu Warriors - time to advance on SIQ


Smartgroup Corporation Ltd (SIQ) a Salary Packaging and Novated Lease Services Provider appeared on our Zulu Warriors screen in June 2018, after a search of the Asia Pacific Small-Mid Cap universe for stocks exhibiting Growth at a Reasonable Price. Post the group’s positive half-year results, we feel a key milestone to decide on the worthiness of its investment case has been passed and it is now time advance on the stock.

We believe SIQ is well placed to deliver Growth via two strategies – natural growth and acquisition. The natural growth is expected from the existing client base adopting new services that the group delivers. Moreover, cost savings from an ongoing integration of the technology platform and “buying” power of the group from suppliers should allow for returns to be maintained and enhanced. Furthermore, operating in a fragmented industry and having a competitive balance sheet means the company is well placed to be a consolidator in the Australian and potentially international markets. 


Implied growth multiples, strong cash flow and healthy returns should support a A$16.70 fair value. The group has delivered 55% EPS growth and maintained a healthy margin and ROE of 15% over the last 5-years and looks well placed to post c22%% in the next 3-years. We anticipate that as the asset base consolidates, investors should see improved capital efficiency helping to maintain a healthy dividend payout ratio.

A positive bias towards SIQ as the company looks to act as one of the key consolidators of a fragmented market, as well as delivering returns through improvement of processes across its asset base. We expect to see continued acquisition announcements in the coming periods. At 1x consensus PEG, we see SIQ as an attractive addition to the portfolio for investors looking for exposure to Australia’s Small-Mid Cap market.


Notes from the Silk Road: Smartgroup Corporation Ltd (SIQ.AX) - Processing GARP

Australia

EML Payments Limited is a financial services company that specializes in pre-paid financial cards.

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EML Payments Limited (EML AU)

Notes from the Silk Road: Smartgroup Corporation Ltd (SIQ.AX) - Processing GARP

Zulu Warriors - time to advance on SIQ Smartgroup Corporation Ltd (SIQ) a Salary Packaging and Novated Lease Services Provider appeared on our...

David Lepper

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