As signaled to the market, Veris have taken significant steps to improve its operating performance in order to increase efficiencies and EBITDA margins. These efforts have now been evidenced in the company's latest Q1 FY2020 results.
Below is the table illustrating the improvements:
Veris have demonstrated a significant increase in EBITDA margins at its core Veris Australia business while also maintaining steady group revenues for the quarter.
This is very strong evidence that the operating improvements that management flagged are indeed having an impact on the company's bottom line.
Better EBITDA margins will also result in a higher overall EBITDA figure if revenue is maintained as it has this quarter. These earnings could then be used to reduce debt which would also reduce the company's enterprise value (EV).
If this were to occur, this could reduce the company's current implied and already historically low ~6x EV/EBITDA multiple.
"We are pleased to report a strong first quarter for the Group, driven by improved margins in the Veris Australia business. Both Elton Consulting and Aqura performed in-line with expectations. Higher margins achieved in the Veris Australia business in Q1 - FY20 are a result of our continuous focus on increasing efficiency and cost reduction. The Group’s revenue remains in line with expectations and we will continue to work towards further margin improvement in the Veris Australia business.”
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