"Claiming its Rightful Place in the Insurance and Employee Benefit Sector"
Vikas Ranjan

(416) 605-7024

vikas@ubikacorp.com
Tushar Handiekar

(416) 822-3722
tushar@ubikacorp.com
 
   
RATING: SPECULATIVE BUY
12-MONTH TARGET: $0.36
SHARE HIGHLIGHTS

Stock Information

AUT :TSX-V

Price Date

Last Price

52-Wk (H)

52-Wk (L)

5-Sep

$0.10

$0.29

$0.07

 

FY07A

FY08E

FY09E

Sales ($M)

$3.2

$4.1

$5.4

EBITDA / Sh ($)

($0.04)

($0.02)

($0.00)

P/Sales

3.4x

2.7x

2.0x

EPS (FD)

FY07A

FY08E

FY09E

Q1

($0.01)

($0.01)

($0.00)

Q2

($0.01)

($0.00)

($0.00)

Q3

($0.01)
($0.00)

($0.00)

Q4

($0.01)

($0.00)

($0.00)

Total

($0.04)

($0.02)

($0.00)

As at June 30, 2008

Cash ($M)

$1.8M

Sh O/S (M)

110M

LT Debt ($M)

$0M

M Cap ($M)

$11M

LT Debt/Total Cap.

0%

Div / Sh

$0

BV per share ($)

$0.03

Div Yield

0%

 
 

COMPANY SNAPSHOT: Automated Benefits Corp (AUT-TSX-V) is an application service provider of claims management software which offers better operational efficiency and reduces costs for two segments of the insurance industry: Group Benefits and Property & Casualty (P&C) insurance. Based in Toronto, Canada, its serves the North American and European markets and employs 30 people. Its business is selling software as service that enable recurring & high margin revenue stream.

 
MANAGEMENT

The company is run by a strong management team and backed by a board with extensive experience in the technology and the insurance industry. The management team’s experience spans various areas including consulting, operations, finance, sales and marketing.

 

LOCATION

Automated Benefits Corp.
212 King St. W., Suite 203
Toronto, ON M5H 1K5

Tel: (416) 359-9339
Fax: (416) 359-1911

www.autoben.com

www.symbilitysolutions.com

CORPORATE OVERVIEW

Automated Benefits Corp.(TSXV: AUT) is a holding company with its head office in Toronto, Ontario, dedicated to providing software applications to the insurance industry. The company offers enterprise grade claims management solutions for the insurance industry.

Its two software platforms, Autoben and Symbility, allow market participants − insurance companies, insurance brokers, benefit consultants and third party administrators (TPAs) − to process medical/dental and property claims, respectively, through Internet-based, next generation technology.



 
 

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INVESTMENT HIGHLIGHTS

  • An emerging Software as a Service (SaaS) company, AUT benefits from recurring and often predictable revenue generation and has high inherent margin leverage in its business model. The business has 73% gross margin and a potential to earn ~20% Free Cash Flow margin.

  • Recurring and growing revenue- AUT’s revenue model involves selling software as a service that enables recurring revenue streams for both businesses (Health Insurance and P&C), which is primarily transaction based that grows organically over time.

  • Strong leverage potential – AUT is now operating from a very lean, low cost but effective operational base. Q2’08 results are a testament to the strong potential for increasing revenue significantly at stable costs, resulting in margin leverage.

  • Established Technology Platform - AUT has two well established, modern and robust claim management solutions to cater to both business segments. Technology leadership is a key strength for the future growth.

  • Managing long sales cycles is the biggest challenge to AUT in the immediate future. Longer term potential is based on the ability to acquire some big accounts and contain costs to become profitable.

  • We rate Automated a SPECULATIVE BUY with a 12-month target of $0.36 (a 260% return potential)


  • All figures are in C$, unless otherwise noted.

 
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