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RESEARCH: Funding Boost For Sensera

FYI | Nov 25 2019

By Pitt Street Research

New funding package to help unlock potential

Sensera Limited ((SE1)) raised substantial capital, totalling $9.4m, in October 2019. The funding package includes $6.4m in a secured debt facility and an equity infusion of $3m via a private placement.

Concurrently, the company launched a share purchase plan (SPP). In our view, this inflow of funds will support SE1 in realising its growth potential.

All cashed up to execute its growth strategy

The proceeds from the funding package will help unshackle SE1 from the binds of limited working capital. Though the company has been consistently signing up new clients, it has been experiencing delays in fulfilling contracts because of constrained working capital leading to delays in booking revenue.

However, we believe this funding package will better position SE1 to leverage incremental sales opportunities from major partnerships such as the recently signed partnership with Meglab, which is a strong testimonial to the relevance of SE1’s products in the mining sector.

Valuation range of $0.40–0.42 per share

Lower sales of higher margin products, coupled with delays in revenue realisation in 1QFY20, has prompted us to bring down our valuation range for SE1. We now assume the company to be EBITDA positive in 2022 vs. the earlier expectation of 2020. Consequently, we now value SE1 at $0.40 to $0.42 per share (was $0.50 to $0.58) using DCF-based valuation.

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