Shares in Boku (BOKU) were marked up considerably on release of the direct carrier billing group’s 2018 numbers, which outpaced analyst expectations at both the top and bottom lines. Revenue was buoyed by a doubling of total payment volumes to $3.6bn (£2.7bn). And Boku reported its first positive full-year adjusted cash profits, at $6.3m – up from losses of $2.3m. True, this excludes various dampeners including increased stock-option expenses of $4.6m (up from $1.5m). But statutory losses still narrowed significantly.
In December, the group announced its acquisition of Danal – a US-based mobile identity specialist – which saw revenues of $5.1m and cash losses of $5.2m in 2017. The news sent Boku’s market value plunging – ostensibly due to the deal’s dilutive impact on earnings. At the time, we moved our tip to ‘hold’. The transaction completed at the start of 2019, so Boku is now “able to diversify its addressable market beyond digitally downloaded content”, to include mobile payments and online banking among other services.
House broker Peel Hunt forecasts adjusted pre-tax profits of $2.5m (an upgrade from $1.3m) and EPS of 0.7ȼ, rising to $15.7m and 4ȼ in 2020.
| BOKU (BOKU) | ||||
| ORD PRICE: | 94p | MARKET VALUE: | £227m | |
| TOUCH: | 92-95p | 12-MONTH HIGH: | 188p | LOW: 63p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 11ȼ* | NET CASH: | $30.1m | |
| Year to 31 Dec | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
| 2014** | 18.3 | -15.0 | na | na |
| 2015** | 19.2 | -16.6 | na | na |
| 2016** | 17.2 | -21.1 | -15.0 | na |
| 2017 (restated) | 24.4 | -28.5 | -19.0 | nil |
| 2018 | 35.3 | -3.0 | -2.0 | nil |
| % change | +44 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
*Includes intangible assets of $22.5m, or 9ȼ a share **Pre-IPO £1=$1.32 | ||||
