Research as a Service (RaaS) has published an update report on Comms Group Ltd (ASX:CCG), which provides a full range of IT and communications services in the highly fragmented MSP/ICT market domestically, following the recent bid from Attura (ASX:ATA) for Cirrus Networks (ASX:CNW). We view CNW as the closest ASX peer to CCG in terms of business mix and market cap. The ATA Scheme Implemented Deed values CNW at 7.4x post-AASB 16 FY23 EV/EBITDA and 8.8x pre-AASB 16. Applying the same multiples to CCG’s FY24 estimates (the first year post-restructure with form guidance) implies a valuation for CCG of $0.130/share and $0.133/share respectively. Importantly, FY24 still has little contribution from the Global division, which has been investing for future growth in the form of UCaaS voice solutions for Microsoft Teams Calling, and in particular Vodafone across APAC, the UK, and Germany. The ATA-CNW Scheme of Arrangement follows on from the recent approach by Superloop (ASX:SLC) for Symbio (ASX:SYM) which highlights the interest in UCaaS/CPaaS Voice solutions that CCG also offers.
Our DCF is $0.16/share which implies 7.4x FY25 EV/EBITDA, which should be more reflective of the global opportunities. The reference price is $0.075/share.