Edison Investment Research - Wameja Limited (WJA) Core business restructuring starts to pay off

Report

Edison Investment Research

Katherine Thompson

Core business restructuring starts to pay off

eServGlobal reported FY16 results in line with its recent trading update. The turnaround in the core business is evident with H216 revenues 58% higher than in H116 and adjusted EBITDA losses significantly reducing over H216. Continued contract momentum combined with good cost control puts the company on track to generate positive EBITDA for FY17. At the same time, the HomeSend joint venture expects to see revenue contributions from new partners coming on line and continues to target break-even in CY17.

09/01/2017 5 EN

Underlying

Wameja Limited

eServGlobal provides mobile money solutions which put feature mobile financial services for users, including mobile wallet, mobile commerce, recharge and agent management features. Co. invests in product development, using technology and aligning with the requirements of customers in 50 countries. Co. is partnering with MasterCard and BICS to build the HomeSend joint venture, an international remittance service based on Co.'s technology and enabling money transfer in over 50 markets. Co. operates in a single segment being the provision of telecommunications software solutions to mobile and financial service providers.

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AU000000ESV3 Australian Securities Exchange Australia

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Katherine Thompson

Other Reports on these Companies

Edison Investment Research

eServGlobal - Break-even target reiterated

eServGlobalâ€™s H118 results confirm it has reduced its cost base further and is still targeting EBITDA break-even for FY18. It also noted it is having conversations with interested parties relating to the disposal of its core business. This would leave the company holding its 35.7% stake in the HomeSend joint venture, which we estimate makes up most of the current valuation.

September 12, 2018 September 12, 2018 5 EN

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eServGlobal - FY18 core business outlook maintained

eServGlobal released a positive H118 trading update indicating that core business orders were ahead of internal forecasts and reiterated its target of achieving EBITDA break-even for the full year. With H1 revenue guidance of â‚¬3.6m/A$5.7m, the majority of these bookings will be recognised in H2, indicating a heavy H2 weighting for the year (c 70%). HomeSend continues to expand rapidly (59% top-line growth), and remains the key value driver for the stock. We leave our forecasts unchanged at this stage; H118 results are due by the end of August.

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eServGlobal - Banking on HomeSend

eServGlobal enters FY18 with a reduced cost base and a fully funded balance sheet; we are forecasting the core business to be close to EBITDA break-even in FY18. With access to Mastercardâ€™s sales force and financial institution customer base, HomeSend has signed up a number of banks to use its cross-border payment platform. As these banks shift volumes onto the platform, this should drive strong growth in volumes and move the joint venture towards profitability.

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Core business restructuring starts to pay off

eServGlobal - Break-even target reiterated

eServGlobal - FY18 core business outlook maintained

eServGlobal - Banking on HomeSend

OPAP - Winning strategy

Patria Private Equity Trust - High liquidity and solid long-term track record

MoneyHero - Emphasis on driving margin

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