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Bullboard - Stock Discussion Forum RediShred Capital Corp V.KUT

Alternate Symbol(s):  RDCPF

Redishred Capital Corp. is the owner of the PROSHRED, PROSCAN and secure e-Cycle brands, trademarks, and intellectual property in the United States. The Company operates through three segments: the granting and managing of shredding business franchises under the Proshred trademark (Franchising and Licensing); the operation of corporately owned shredding businesses (Corporate Locations); and... see more

TSXV:KUT - Post Discussion

RediShred Capital Corp > Petty cash - Dean
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Post by Possibleidiot01 on Dec 20, 2023 1:57pm

Petty cash - Dean

Redishred Capital Quick Update - $KUT.v

Quick update after Q3 2023

 
 
 

Price: $3.20 CAD

MC: 56.6 mil CAD

EV: 92.4 mil CAD

1 year performance: -22%

KUT reported last Thursday and held a call Friday morning. Results were ahead of my (lowish) expectations given the decline in paper prices and the outlook was as expected. The stock has bounced a bit off the lows but is still off over 20% in the last year.

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Quarter Recap

  • Revenue up 5%

    • This was driven mostly by acquisitions

    • Shredding revenue up to 11.9 mil from 10.1 mil

    • E-waste at 678k from 351k

    • Scanning at 624k from 536k

    • Recycling revenue down to 1.7 mil from 3.1 mil

  • EBITDA was down 16%

    • This was mainly due to decline in paper prices

  • Sounds like they will meet the objectives for M&A this year

  • Ebitda excluding the impact of recycling was up 121%

Call Notes

  • Working on obtaining SOC 2 certification as an information protection company

    • This will allow them to do more business with governments

  • Security Shred has been integrated

  • Baltimore acquisition integration going as expected

  • Q4 is off to a bit of stronger start than typical

Closing Thoughts

The business continues to hum along. They grew shredding revenue by 21%. As well, they continue to grow e-waste and scanning services. If we remove what the business can control, they are doing well.

Q3 and Q4 are the toughest comps for paper prices, so I’m expecting that the stock to bottom and the narrative to change a bit as we move into 2024. The incremental margin from recycling is more of a driver than I originally anticipated when I purchased shares. Having said that, I never expected paper prices to be a material contributor to the thesis.

 

Thanks for reading.

Dean

* long KUT.v

 

 

 
 

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By Dean · Launched 2 years ago

Canadian Microcap Investing & Some Lifting



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