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All posts by Rhys Whiting

Clare Capital in the Media

Australian Business Insider – 13th September 2017 – https://www.businessinsider.com.au/xero-growth-story-2017-9

National Business Review – 14th August 2017 – https://www.nbr.co.nz/article/asx-no-green-pasture-nzs-young-companies-cs-p-206393

Australian Business Insider – 8th August 2017 – https://www.businessinsider.com.au/16-australian-tech-companies-that-spend-more-on-staff-than-their-revenue-2017-8

National Business Review – 2nd August 2017 – https://www.nbr.co.nz/article/which-nzx-tech-companies-are-most-and-least-efficient-their-staff-cg-p-205960

Australian Business Insider – 26th July 2017 – https://www.businessinsider.com.au/chart-the-10-biggest-players-are-worth-69-of-all-the-tech-firms-listed-in-australia-and-new-zealand-2017-7

Australian Business Insider – 19th July 2017 – https://www.businessinsider.com.au/chart-these-10-companies-paid-85-of-the-dividends-local-tech-firms-gave-out-last-year-2017-7

National Business Review – 18th July 2017 – https://www.nbr.co.nz/article/aussie-vs-nz-tech-stocks-which-are-best-dividends-ck-p-205390

National Business Review – 12th July 2017 – https://www.nbr.co.nz/article/drury-whether-xero-will-follow-pushpays-lead-us-listing-ck-p-205174

Sky News – 12th July 2017 – http://www.skynews.com.au/business/business/company/2017/07/12/xero-to-increase-investment-in-ai.html

Australian Business Insider – 5th July 2017 – https://www.businessinsider.com.au/chart-the-best-and-worst-performing-listed-tech-companies-in-australia-and-new-zealand-2017-7

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Tech Updates – Complete Series #1-17

Since July, Clare Capital has been producing a weekly, two-page Tech Update incorporating different charts and listed company analysis for our distribution list. The Updates have included:

  1. SaaS Revenue per Employee;
  2. Remuneration vs Performance;
  3. Capital Used vs Recurring Revenue;
  4. Cash Burn & Runway; and
  5. The 40% Rule (which was highlighted by Michael O’Donnell in an October Stuff article).

On the back of the first FounderCon, which Clare Capital sponsored, we have released the Complete Series of Tech Updates #1-17 [this link takes you to the full report] on our Blog and on the ShowGizmo app.

Please feel free to download and share around with anyone who you think would find it useful.

Contact us if you would like to be on the distribution list.

The what and why Of EBIT and EBITDA

One of the common questions we get asked is why does the term EBIT or EBITDA get used so frequently in valuation work?

EBIT stands for Earnings Before Interest and Taxes (EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortisation).

EBIT is sales less expenses (including depreciation) adding back any interest paid and subtracting any interest received.  The only change to EBITDA is that depreciation and amortisation are added back.

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What is a share price

If you ask the simple question of “what is a share price?” – many people struggle to answer. People will have an opinion on whether the share price of Telecom or Air NZ is too low or too high – but they can’t answer the simple question of “why?”. I usually get an answer about assets – but nothing very specific.

So how does (or should) an investment banker think about the value of a business?

I am going to use a minimum of jargon here – I promise. Please see the glossary page for some definitions of valuation terminology, why various terms are used and more information about the valuation methodology.

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Cartoon Valuation

We are going to cover valuation techniques in a separate post – but here is the Valuation 101 of how investment bankers determine if a share is currently undervalued or overvalued. We use a piece of financial economics called a discounted cash flow (DCF) model. This is a key part of corporate finance. Now value does not always equal price – but as the Benjamin Graham quote goes, “In the short-term, the market is a voting machine and in the long-term a weighing machine”.

The DCF is the primary method in corporate finance theory for calculating value. In corporate finance – value is a DCF…

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Introducing myself – Mark Clare from Clare Capital

My name is Mark Clare and I am an investment banker working in New Zealand.

There is a lot of misconception and misunderstanding about the work I do. My industry is partly to blame for this situation. There is not a lot of “openness” in investment banking (or “IB” as it is called by insiders). But this is the 21st century – and everything is in a state of flux.

I am building a 21st century investment banking firm – I want it to be the first choice of anyone seeking corporate finance advice in New Zealand. This blog (a term I am not afraid of) is part of that process.

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