ASX-aspirant Cuscal valued at as much as $736m: BofA
Bank of America research for IPO hopeful Cuscal Limited landed in front of investors, valuing the end-to-end payments outfit at as much as $736 million.
Mastercard is one of the major shareholders in Cuscal. Michel O'Sullivan
Street Talk understands the report, conducted by Cuscal’s sole lead manager has been distributed widely ahead of an international roadshow and possible ASX float before the end of the year.
Cuscal is owned by MasterCard, Bendigo and Adelaide Bank and most of the big credit unions.
“Our discounted cash flow-based valuation range of $564 million to $736 million implies 18.1-times to 23.6-times financial year 2024 estimated proforma earnings,” potential investors were told.
“Valuations are supported by an outlook for profit growth, strong free cash conversion and a history of fully franked dividends.”
BofA positioned Cuscal as an alternative to major banks in the payments sector and positioned for growth, tipping growth opportunities rising from “the shift to non-cash payments, ongoing investment, and potential for inorganic growth”.
“Australian non-cash payment volumes have grown at 8.1 per cent 3-year compound annual growth rate vs Cuscal at 15.2 per cent 2-year compound annual growth rate, with a structural shift to regular, low-value payments and accelerating growth in the New Payments Platform,” analysts said.
By the numbers, BofA forecasts proforma NPAT from continuing operations of $31.1 million, implying 43 per cent growth in FY24. Analysts say revenues will be supported by higher payment volumes and expenses moderated as the company’s “investment initiatives subside”.
Cuscal was created in 1990 by member organisations including Australia’s largest credit union CUA. The business offers payments
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