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Bullboard - Stock Discussion Forum Eurocontrol Technics Ord EUCTF

"Eurocontrol Technics Group Inc is a Canada-based company involved in acquisition, development, and commercialization of security, authentication, verification and certification markets. The company through its subsidiaries is engaged in designing, manufacturing, marketing of energy-dispersive X-ray fluorescence (ED-XRF) systems, and developing technology and property that combines two... see more

OTCPK:EUCTF - Post Discussion

Eurocontrol Technics Ord > GFI valuation
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Post by lscfa on Sep 02, 2015 11:36am

GFI valuation

Does not include revenue that will be derived from other sources



    2016 2017 2018 2019 2020 2021 2022 2023 2024
                     
  New GFI clients o/s 2 4 6 8 10 12 14 16 18
  GFI revenue 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0
  Logistics revenue 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0
  5% royalty (min 1.5) 1.5 1.5 2.3 3.0 3.8 4.5 5.3 6.0 6.8
  Admin, R&D (2.5) (2.5) (2.5) (2.5) (2.5) (2.5) (2.5) (2.5) (2.5)
  net income (loss) (1.0) (1.0) (0.3) 0.5 1.3 2.0 2.8 3.5 4.3
  eps (90 mil shs.) (0.011) (0.011) (0.003) 0.006 0.014 0.022 0.031 0.039 0.047
                     
  closing cash balance 15.0 14.0 13.8 14.3 15.5 17.5 20.3 23.8 28.0
  cash per sh. 0.17 0.16 0.15 0.16 0.17 0.19 0.23 0.26 0.31
  + 15x p/e multiple n/a n/a n/a 0.08 0.21 0.33 0.46 0.58 0.71
  fair value (stock price) 0.17 0.16 0.15 0.24 0.38 0.53 0.68 0.85 1.02
                     
                     
                     
                     
  New GFI clients o/s 2 5 8 11 14 17 20 23 26
  GFI revenue 5.0 12.5 20.0 27.5 35.0 42.5 50.0 57.5 65.0
  Logistics revenue 10.0 25.0 40.0 55.0 70.0 85.0 100.0 115.0 130.0
  5% royalty (min 1.5) 1.5 1.9 3.0 4.1 5.3 6.4 7.5 8.6 9.8
  Admin, R&D (2.5) (2.5) (2.5) (2.5) (2.5) (2.5) (2.5) (2.5) (2.5)
  net income (loss) (1.0) (0.6) 0.5 1.6 2.8 3.9 5.0 6.1 7.3
  eps (90 mil shs.) (0.011) (0.007) 0.006 0.018 0.031 0.043 0.056 0.068 0.081
                     
  closing cash balance 15.0 14.4 14.9 16.5 19.3 23.1 28.1 34.3 41.5
  cash per sh. 0.17 0.16 0.17 0.18 0.21 0.26 0.31 0.38 0.46
  + 15x p/e multiple n/a n/a 0.08 0.27 0.46 0.65 0.83 1.02 1.21
  fair value (stock price) 0.17 0.16 0.25 0.45 0.67 0.90 1.15 1.40 1.67
Comment by af01erer01af on Sep 02, 2015 1:24pm
Very interesting and informative projection and thank you for sharing. What are your assumptions in this model, in terms of new GFI clients o/s? Tha
Comment by lscfa on Sep 02, 2015 1:35pm
It took GFI 5 years to gain 3 clients so I assumed that with Sicpa's help and contacts with 200 governments they should be able to do 2 or 3 new contracts per year. I also assumed that EUO will reduce its SG&A by $500,000/yr from the roughly $3 millio/yr it does now.(less marketing, less admin) Another way to look at the analysis is EUO will have $0.177 / sh in cash after the divestiture ...more  
Comment by shawshank on Sep 02, 2015 7:16pm
Comment by zenvesting on Sep 03, 2015 10:10am
Interesting analysis, but it has a major flaw, it fails to recognize the differences in he size of the markets of the govrments that could/would be served.  GFI's current clients don't even rank in the top 100 of world oil consumption, so if SIPCA could land just one contract with a top 50 oil consumption country it could be more than double all three of GFI's current clients in ...more  
Comment by lscfa on Sep 03, 2015 10:16am
You are correct. Different countries will produce different size contracts. I would not call it a flaw. Just a conservative or low end estimate of the potential. I had to use EUO's numbers to get some sense of average contract size. ($8 million / 3 clients = $2.5 million per year)
Comment by tsawboss on Sep 03, 2015 11:05am
I would say not recognizing any EDXRF hardware sales by Xenemetrix resulting from any contracts, new or old, very conservative.
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