Money transfer group eServGlobal, whose technology allows mobile phone users in the developing world to use their phone as a sort of cash machine, has delivered strong sales growth in the six months to end April and importantly looks on track to deliver the sustained margin improvement required to turn the business into profit.
True, this will be later than we had first envisaged after contract delays resulting from the uncertain situation in the Middle East led to a profit warning in April, shortly after our March buy tip. But with monthly revenues 20 per cent ahead at A$2.1m so far this year and management guiding towards full year sales of A$26m to A$29m (£17m-£19m), analysts at Cenkos expect the business to be generating cash profits in the second half of 2012. Off-loading of USP contracts to Oracle, as well as costs savings have been key.
