Edison Investment Research - Wameja Limited (WJA) Encouraging FY17 order outlook despite FY16 revenue shortfall

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Edison Investment Research

Katherine Thompson

Encouraging FY17 order outlook despite FY16 revenue shortfall

eServGlobal has confirmed that revenues for FY16 fell below its guidance range and, despite a material reduction in costs, EBITDA profitability was not achieved. However, recent order intake and the prospect of winning several material contracts that are currently in negotiation provide a more positive outlook for FY17. Management also confirmed that HomeSend continues to make progress and is on track to break-even in 2017.

17/11/2016 3 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

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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

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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.

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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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Encouraging FY17 order outlook despite FY16 revenue shortfall

eServGlobal - Break-even target reiterated

eServGlobal - FY18 core business outlook maintained

eServGlobal - Banking on HomeSend

Norcros - Sale of Johnson Tiles UK agreed

Henderson Far East Income - Repositioning to raise total returns

Freelancer - AI to drive return to growth

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