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Boku users continue to climb

Total payment volumes jumped by more than a third during the first half
Boku users continue to climb

Boku (BOKU) nudged into the black in the first half, posting a modest operating profit of $0.2m (£0.15m) compared with a loss of $2.3m in the same period last year. Much of the company’s revenue growth was thanks to the “rude health” of its payments division, which fattened up as digital merchants such as Netflix (US:NFLX) enjoyed stronger demand during lockdown.

IC TIP: Hold at 91p

Indeed, total payment volumes were up by more than a third to $3.1bn, with 11m new users making their first transaction on the company’s platforms.  The scale is perhaps unsurprising given that Boku launched carrier billings in partnership with the likes of Alphabet’s Google (US:GOOGL) and Spotify (US:SPOT) in the period. 

Meanwhile, Boku’s smaller identity division saw its sales drop by a fifth to $2.7m, which management attributed to the impact of coronavirus on existing merchants. The segment was still able to build on its international carrier supply, which now has more than 200 clients globally. 

House broker Peel Hunt forecasts adjusted pre-tax profits of $7m and EPS of 1.9 cents in the 2020 full year, rising to $12.2m and 3.2ȼ in 2021. 

BOKU (BOKU)    
ORD PRICE:91pMARKET VALUE:£ 257m
TOUCH:89-92p12-MONTH HIGH:114pLOW: 49p
DIVIDEND YIELD:naPE RATIO:na
NET ASSET VALUE:30ȼ*NET CASH:$57m
Half-year to 30 JunTurnover ($m)Pre-tax profit ($m)Earnings per share (ȼ)Dividend per share (ȼ)
201923.5-2.5-0.1nil
202024.70.9nilnil
% change+5---
Ex-div:na   
Payment:na   

*Includes intangible assets of $47m, or 17ȼ a share      

£1=$1.29