DMXCP Portfolio top ASX holdings update – 28 February 2025

Company

Weight  

Notes

Energy One Limited  (ASX:EOL)

~5%

EOL reported a much-improved underlying NPAT of $3.9m. It comes after a couple of messy years where the company has been building out its 24×7 operating centre, dealing with a cyber attack, endured wage inflation, and reorganizing senior management.  ARR increased 18% driven by the strong sector tailwinds in renewable energy in Europe. Excitingly, management expect 15-20% ARR growth going forward and 50% of new ARR to drop to EBITDA, setting the company up for rapid EPS growth and 30% cash EBITDA margins.   To quote CEO, Shaun Ankers, EOL now have ‘clear air’ .

Findi (ASX:FND)

~5%

FND had a particularly eventful month, finalizing its recent TATA acquisition, extending its agreement with Union Bank of India and, most importantly, confirming it was on track to meet its FY25 EBITDA guidance.  FND expects revenue to now grow 140%  in FY26, through a combination of organic growth in its traditional business, expansion of its white label business and contributions from its recent acquisitions. This revenue growth will drive substantial uplift in EBITDA, supporting FND’s expectations of a $1b+ IPO value from its Indian subsidiary, of which FND’s share is ~70% – a substantial uplift on FND’s current EV.

Pureprofile (ASX:PPL)

~4%

As foreshadowed, PPL delivered a very strong result with a $1.6m NPAT (up from 0). The result was underpinned by international revenue growth of 30% – Management has suggested this level of growth is expected to continue.  With $3.3m of PPL’s forecast FY25 EBITDA already delivered in H1, only $1.9m-$2.5m is required in the second half to meet its guidance. While Q3 is seasonally weaker, we think there is a good chance PPL upgrades its EBITDA guidance again before year-end. 

Sequioa (ASX:SEQ)

~4%

SEQ’s half year report highlighted  its strong balance sheet with over $16m in cash and listed securities as well as ~$10m in unlisted investments. The first half saw encouraging progress in its SMSF administration and document business, although its advice business experienced weaker margins. SEQ continues to trade on a 10%+ dividend yield (fully franked) and we expect  EBITDA of $8m to be delivered for the full year.

EDU Australia

(ASX:EDU)

~4%

EDU (which has a December year-end)  reported a FY24 NPAT of $2.6m  – a material improvement on $3.0m loss in FY23. After a breakeven result in 1H24, all of this NPAT was delivered in 2H24. At 30 June 2024, EDU’s key business, Ikon, had  1,709 students. Ikon now starts FY25 with almost twice the level of students (3,232). On the back of that enrolment uplift, and the operating leverage in the business, we are expecting EDU to deliver a material increase on its $2.6m 2H24 NPAT profit in 1H25. With Ikon students undertaking 3-4year degree courses, we can model the expected cash flows of EDU over the short to medium term with some confidence, to support a strong DCF valuation thesis here.

Count (ASX:CUP)

~4%

CUP reported a strong underlying NPATA up 209% to $6.9m, assisted by the full year contribution from its Diverger acquisition. Pleasingly, post-acquisition EBITA margins have increased from 13% to 19%, with earnings now balanced across its accounting, advice and services divisions. CUP is the 2nd largest wealth licensee in Australia and trades on < 10x PE.

Prime Financial

(ASX:PFG)

~4%

After a weak H124, PFG reported a much improved first half, with EBITDA up 102% on last year, driven by  strong contribution from acquisitions and lower one-off costs. With PFG’s FY25 guidance of 15-20%+ Revenue & Underlying EBITDA growth confirmed, PFG will achieve its $50m revenue target in FY25, while it trades on ~10x PE.

Austco  (ASX:AHC)

~3%

AHC have continued their strong momentum from 2H24 with revenue up 62% and NPBT up 270% to $3.9m. While that revenue growth was aided by acquisitions, we estimate organic growth was in the mid-20% range. Despite the strong growth over the last year, AHC have managed to maintain their contracted order book which will provide revenue visibility in the years ahead. Despite a rerate, AHC still trades on an undemanding mid-teens valuation with strong organic growth and global revenues.

Evolve

(ASX:EVO)

~3%

EVO reported their FY24 result with 11% growth in underlying EPS to 7.9c. While occupancy dropped across the industry and EVO, their margins remained strong as there were less under two’s as a proportion of total children than 2023 (under two’s require a higher staff cost per child). We expect a strong result for FY25 as acquisitions in 2024 drive earnings.  We will be watching the regulatory backdrop closely to see if the activity test is abolished in January 2026.  This is expected to drive demand in the sector, and be very positive for EVO. In the meantime, EVO trades on a 9x PE and 7.5% fully franked yield.

Kip McGrath

(ASX:KME)

~3%

KME delivered a much improved first half result with EBITDA of $3.4m up 46%, and reinstating its dividend. The result would have even been stronger but for its US business being impacted by funding delays following the US election. The highlight of the KME result was its cash generation, with CAPEX reduced from $2.7m to $0.9m. With KME typically having a much stronger second half, we expect KME to generate FY25 EBITDA of $8m+ and free cash for the year of $4m+. KME’s EV is ~$24m.