Over 2.5bn adults worldwide can't access formal financial services, but a growing proportion have mobile phones that can transfer money using eServGlobal 's (ESG) technology. Strong demand helped the company earn adjusted cash profits of A$0.9m (£0.5m) in the six months to 30 April, reversing a loss of A$0.7m the previous year.
That excludes the £18.7m it received from its spin-off of HomeSend - an international remittance hub that lets users send money directly to recipients' mobile wallets - into a joint venture controlled by MasterCard. It still retains a 35 per cent stake, which could prove more lucrative than its core business if HomeSend gains traction in the $400bn global remittances market, management tells us.
eServGlobal also signed a global agreement with MoneyGram that gives it access to the money-transfer specialist's customers in more than 200 countries. It further broadened its revenue base by adding mobile operator Zain Group, which targets the Middle East and North Africa. Those and other deals helped it almost double its sales backlog to A$4.8m.
Broker Canaccord Genuity expects full-year pre-tax profit of A$35.1m and a loss per share of A5¢. It expects the company to quadruple its cash profit margin to 20 per cent by 2018.
| eServGlobal (ESG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 42p | MARKET VALUE: | £105m | |
| TOUCH: | 41-42p | 12-MONTH HIGH: | 59p | LOW: 25p |
| DIVIDEND YIELD: | nil | PE RATIO: | 7 | |
| NET ASSET VALUE: | 24 A¢ | NET CASH: | A$8.6m | |
| Half-year to 30 Apr | Turnover (A$m) | Pre-tax profit (A$m) | Earnings per share (A¢) | Dividend per share (A¢) |
|---|---|---|---|---|
| 2013 | 13.6 | -2.1 | -1.1 | nil |
| 2014 | 16.9 | 33.8 | 8.2 | nil |
| % change | +24 | - | - | - |
Ex-div:- Payment:- £1=A$1.82 | ||||
