Margin protection despite input cost inflation. Managing supply chain & UK store expansion. Key investor takeaways from Monday's strong FY'22 results. Health of the consumer in light of the cost of living crisis. In this interview, CEO Sukh Chamdal, Marketing Director Chay Watkins & interim CFO David Forth take me though the latest developments: Overall, this short-term impact which should be actionable from the short side if caught early might also lead to a buying opportunity later on, if the stock overreacts (that is, if it ends up falling more than 10% or so).If you’re looking to invest in a resilient, capital-light business that offers a 4.5%+ dividend yield alongside a brand that resonates with families right across the UK then Cake Box (CBOX) - the UK’s ‘go to provider’ of luxury yet affordable, fresh cream cakes – fits the menu. Since this is new and unexpected information, it's likely that at least a significant portion of this now-at-risk business will be discounted by the market in the next few days.
#NEWSFLOW 24 TV#
While this is short-term in nature, the potential fundamental impact is pretty clear.Ī TV exposé in Australia calls into question Maximus' business there, a business representing 10% of Maximus' revenues and possibly around the same portion of its operating profits. It wouldn't thus be surprising if the stock quickly loses at least a visible fraction of 10% within the next couple of days. This profitability should at the very least be in line with the entire company's profit margin, so at least around 10% of the overall company's profits could be at risk. Since the Australian contract is up for grabs later in the year, this particularly negative publicity at the very least stands to hit Maximus' Australian profitability. And basically, in a way that was similar to what has been happening with the private education industry in the U.S., the exposé was ugly for the companies involved - alleging fraud and wrongdoing left and right. This part of the Australian business falls into the "Human Services Segment" described above, and It is involved in outsourcing work for Australia's employment services, namely handling welfare recipients.Īs it turns out, yesterday an Australian channel which would be equivalent to the British BBC did an exposé on exactly these outsourced services. It accounted for 10% of Maximus' FY2014 revenues. Notwithstanding, the short-term newsflow is badĪs Bronte Capital explained in his blog entry, Australia is a significant part of Maximus' business. The stock isn't overly expensive at 13.5x EV/EBITDA, given the underlying story and consistent growth and profitability including a 28% ROE. Maximus has been growing steadily and profitably, and is seen as a prime beneficiary of programs such as ObamaCare as well as a trend towards outsourcing which seems to be hitting the world over. (The contribution to operating income from both segments added together exceeds 100% because I did not consider overhead) It also represented 23.7% of its operating income. This segment constituted 24.7% of Maximus' revenues in the 3 months to December 31, 2014. The Human Services Segment, which includes business and consulting services in several other segments, such as welfare, child support, etc.It also represented 77.2% of its operating income This segment constituted 75.3% of Maximus' revenues in the 3 months to December 31, 2014. The Health Services Segment, which includes business and consulting services in the healthcare segment.It divides these services into two segments: She passed away in Bellingham, at Silverado Memory Care more. Maximus is an outsourcing company providing business services to governments. Delores Holleman September 24, 1944JDolores was born on Septemin Bellingham to Thorval and Emma Berge. Thanks to Australian-based Bronte Capital, I've been made aware that Maximus ( NYSE: MMS) is exposed to short-term negative newsflow which could have a visible impact on the share price and fundamentals.
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