Globetrotting workforces and growing usage of smartphones and tablets for work are fuelling demand for mobile security and connectivity. Globo (GBO) provides those services to the likes of Intel and SAP, and owns a mobile app development platform. It has shifted its focus from consumers to the enterprise market, which offers shorter payment cycles and more reliable licensing revenues. That has significantly improved its free cash flow, a historic bugbear.
Globo is also expanding aggressively in the US: first-half administrative and distribution costs spiked by more than four-fifths as it built up brand recognition, chased customers and secured partnerships across the pond. Globo more than doubled its employee-device and consumer-app licences to 834,000 and 31.8m, respectively, in 2014. It also introduced new mobile management and cloud features, and acquired Sourcebits, a US-based app developer whose clients include Coca-Cola and Hershey’s. Those fuelled an estimated 90 per cent rise in GO!Enterprise sales and strong consumer revenues last year, sending group sales up 48 per cent to €106m.
Globo offers exposure to the mushrooming enterprise mobility and app markets. Its shares have risen strongly this year, but at 48p they trade at just seven times broker Canaccord Genuity’s forecast EPS for 2015. Buy. TM