DASHBOARD: Enterprise ICT valuation comps for May 2023

Dashboard containing:

• Monthly and annual share price movements for main listed stocks
• Key earnings multiples
• Forward earnings multiples vs forward growth estimates
• Share price movements tracked over last twelve months

Commentary

Key developments

Most Enterprise ICT stocks in Australia and New Zealand are down over the last year. Overall, economic growth is expected to be sluggish relative to 2022, creating uncertain performance for Enterprise ICT equities. Some of these companies are growing through acquisition rather than organically, and are exposed to a downturn.

Vonex

Vonex stock is a micro-cap which explains its extreme volatility, and recent downward slumps. The stock has fallen roughly 60% in the last 6 months. A major writedown of goodwill in its 1H23 results made the company technically unprofitable, discouraging investors. A March correction to the calculated underlying EBITDA for 1H23, from $3.7m down to $2.7m, may have also spooked some investors.

Webcentral

Webcentral continued to suffer in May, with the stock declining over 60% over the last 6 months due to sluggish financial performance. The company’s half yearly results released in late February detailed a decline in EBITDA of 4% over the period. Losses after tax fell from $10.8m in 1H22 to $3.6m in 1H23, but this has not been enough to lift the share price.

Comms Group

Comms Group stock continued its volatility and downwards trend, bringing the stock to a roughly 20% decrease in the last 6 months. The company reported pre-tax profit of $1.4m in 1H23, and has been growing revenue through acquisition over the last two years. But a flat organic revenue performance has failed to impress investors.

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