Morgans Financial Limited

Xenith IP Group (XIP) has upgraded EBITDA guidance from prospectus forecasts of A$7.5m to A$8.8-9.0m (c19% upgrade to prospectus). Given XIP's exceptionally strong 1H16 result, FactSet consensus EBITDA had moved to A$8.6m for the full year with the upgrade implying a 2-5% improvement to consensus EBITDA. As anticipated the upgrade was driven by an 8% uplift in revenue, which reflects strong trading performance experienced across all areas of the business. We have made minor upgrades to our FY16 and FY17 forecasts, which see our EBITDA lift by 5% to A$9m (FY16) and 1% to A$9.7m. This has resulted in our EPS increasing by 7% in FY16 and 1% in FY17. We note that XIP's balance sheet remains well placed to fund acquisitions with the group sitting in a net cash position. We remain attracted to XIP's strong cash flow generation, high ROE and ability to consolidate the fragmented IP market. Read more for our recommendation: (VIEW LINK)


Please sign in to comment on this wire.