📅 May 2025
🌐 Website: www.catapultsports.com
Here is the forensic financial analysis of Catapult Group International Ltd (ASX:CAT) for FY2025.
📊 Balance Sheet
| Risk Indicator | Status | Comments |
|---|---|---|
| Goodwill >25% of Assets | 🔴 Red Flag | Goodwill is $51.26m, or ~31% of total assets ($165.89m); exceeds the 25% risk threshold. |
| Rising Receivables Days | ✅ No Flag | Receivables days improved from 44.1 (FY24) to 38.4 (FY25); well below 90-day threshold. |
| Inventory Growth vs Profit | 🟠 Amber Flag | Inventory rose 122% YoY, while net losses declined but not proportionately. |
| High Borrowings | ✅ No Flag | Debt-to-equity ratio is only 0.043; borrowings reduced significantly from prior year. |
| Loans to Related Parties | ✅ No Flag | No related party loans or advances disclosed. |
| Idle Cash | ✅ No Flag | Cash balance ($10.76m) stable and appears actively managed with debt repayments. |
📈 Income Statement
| Risk Indicator | Status | Comments |
|---|---|---|
| Revenue vs Profit Divergence | ✅ No Flag | Revenue grew 16.5% while net loss improved 47%; no divergence. |
| Capitalised R&D/Interest | 🟠 Amber Flag | R&D capitalisation disclosed; justified for SaaS model but warrants ongoing scrutiny. |
| Extraordinary Items | ✅ No Flag | No recurring or significant one-off items noted. |
| Tax Rate Drop | ✅ No Flag | Shift to tax benefit driven by deferred tax and share-based adjustments. |
| Profit vs Cash Flow | ✅ No Flag | Strong operating cash flow ($38.45m) vs. net loss ($8.81m); positive sign. |
| One-Off Gains Boosting Profit | ✅ No Flag | No material asset sales or revaluations influencing earnings. |
🏛️ Governance, Disclosure & Audit
| Risk Indicator | Status | Comments |
|---|---|---|
| Auditor Changes | ✅ No Flag | Ernst & Young remains the auditor; no changes noted. |
| Audit Qualifications | ✅ No Flag | Clean, unqualified audit opinion provided. |
| Exec Departures | ✅ No Flag | No unexpected CEO/CFO resignations. |
| Transparency Issues | ✅ No Flag | Disclosures consistent, with strong detail across all areas. |
| Board Weakness | ✅ No Flag | Board includes experienced professionals with diverse backgrounds. |
| Executive Pay Misalignment | 🔴 Red Flag | Exec comp up 19% despite ongoing losses; indicates misalignment with shareholder value. |
| Promotional Language | ✅ No Flag | Management tone balanced and aligned with performance metrics. |
✅ Final Summary
| Category | 🔴 Red Flags | 🟠 Amber Flags |
|---|---|---|
| Balance Sheet | 1 | 1 |
| Income Statement | 0 | 1 |
| Governance / Disclosure | 1 | 0 |
🔴 Total Red Flags: 2
🟠 Total Amber Flags: 2
🟠 Amber & 🔴 Red Flag Overview
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Goodwill Load: At ~31% of assets, goodwill is elevated and may require future impairment scrutiny.
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Inventory vs Profit: Inventory rose disproportionately to net profit gains, posing a risk if demand falters.
-
Capitalisation Practices: While standard for SaaS firms, R&D capitalization should be reviewed for consistency.
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Executive Compensation: Compensation increases outpaced financial improvements, raising alignment concerns.
Disclaimer: This information is provided purely for educational purposes. It takes no account of an individual’s personal financial circumstances and hence can in no way constitute financial advice. The above data may be subject to errors or inconsistencies for which the author takes no liability. It is imperative that all investors do their own research or if they need advice, seek it from a qualified financial adviser.
Forensic Analysis: Catapult FY25