Mathan Somasundaram

Josh Kannourakis has maintained a BUY with target price of $0.40. A solid strategic acquisition with highly complementary services and myriad growth opportunities. Importantly, we note integration will be able to start immediately due to the revenue (and gross profit margin) hurdle rather than EBITDA and we expect group integration and synergy extraction to be accelerated over the coming 12 to 18 months. OTC remains well positioned to achieve its growth aspirations of $25m to $30m EBITDA from Surveying over the medium-term. Additional acquisitions remain the key catalyst for the stock. OTC is trading on an attractive FY17F P/FCF multiple of 7.4x and FY18F PEG of 0.43. Our price target increases to $0.40 per share (prev. $0.37).


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