27 August 2014

Silverlake FY2014 Result Summary - Aug 2014

Income Statement Summary



Balance Sheet Summary


Balance Sheet Ratio and Cash Flow Summary and EPS/NAV 


Silverlake recorded improved revenue and net profit (up 26-27%) after acquisition of stake of subsidiaries during financial year 2014. The net profit margin is around 50%, which indicates that this is a business with high barrier of entry / lesser competition. Total PPE to Total Asset Ratio is very low, indicates that this is a business that do not require high capex requirement in order to generate more revenue and cash flow.

As you can see from cash flow summary, the free cash flow is positive and the company is actually distribute almost 100% of the free cash flow back to the shareholders as dividend, as they have enough cash flow to grow their business via M&A or recurring revenue from existing customers.

Estimated ROE is about 40% - 50% for Silverlake, with dividend (inclusive of special dividend) yield of around 4% for Silverlake. I personally prefer this business, as it provides certain dividend yield for passive investors although I also quite worry that the company may fight harder in order to secure more recurring revenue from existing customers. It also may venture into other sectors other than finance sector, which I think is a good opportunity for the company.

With PE of around 26X, I believe that it is quite high now, but if you have longer holding period and believe that the company can grow more than 20% for at least next few years, then it maybe a good chance for you to accumulate this counter.


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