Eservglobal Share Discussion Threads

[simso] 25/10/2017 12:37

AS GHF has already commented, I also got placing shares and now cannot trade for a short period of time. I imagine all the Major Insti's and shareholders are in a similar boat, and therefore a slightly false market at the moment. Certainly not one where Technical analysis of charts will have any meaning.

Hopefully once the final placings are complete, we will have a company with a nice clean Capital Structure, no onerous debt, the cash to deal with costs to get the core business back to breakeven, and to ensure we properly partake in the exciting Homesend developments. Hopefully the next newsflow will all be about confirmations of new Banks signing up, and plenty of excitement for the share price!

[brucie5] 25/10/2017 09:48

Immediate retrace looks near to completion. Unless of course we go all the way down to 9p.



But it's the 3 year chart I like. On this one 10p looks like a threshold.

[doubleorquits] 24/10/2017 17:45

Cheers GHF.

I have not had anything offered me even though I hold.

EDIT: Not expecting anything until end of this week as per:

Offer documentation and personalised 27 October 2017
entitlement and acceptance forms
sent to eligible retail holders
Retail Offer opens

[glasshalfull] 24/10/2017 17:36

Doubleorquits - I took some in the placing & precluded in dealing following the announcement. My broker clarified through contacting the advisors legal dept to check on Friday as I wished to add further in the market. Duly informed that I was unable to trade irrespective if on AIM or ASX.

Hope this clarifies.

Kind regards,
GHF

[bamboo2] 24/10/2017 16:47

Hi double, re tp's, I was just thinking the same thing myself.

I plan to look at some charts a bit later this evening, so will edit/add to this post then.

I must admit to finding the timing on the earlier rns quite confusing.

=============================================

Hi double, I had a look at the chart. It looks like the price just failed to confirm the High and Tight Flag pattern for now. It was a hairs breadth away from confirmation. Obviously the qualification criteria is not set in stone, but I err on the side of caution with this kind of pattern.

There is plenty of news in the pipeline here. This pattern can confirm with eod close above 12.9 anytime from now until approx. 27 November.

Next potential turns are 27/30 Oct, 8Nov, 15Nov.

edit, 22:47 Wed 25 Oct, looks like a potential turn tomorrow, rather than Friday.

[doubleorquits] 24/10/2017 16:43

Bamboo2 - is your TP of 17p now in play as we closed above 12.9p Friday?

[doubleorquits] 24/10/2017 16:41

Trading was only halted in Australia (ticker ESV.ASX).

Placees get their quotas today but retail investors need to wait. FWIW with the dilution I reckon share price should settle around 11.5-12p (based on 13p for 75% of shares and 9p for 25% i.e hold 30k shares at 13p and receive 10k at 9p = 40k shares for outlay of £4800).

[bamboo2] 24/10/2017 16:13

Glass, I think that might be this morning [just gone] but not certain.

[glasshalfull] 24/10/2017 16:08

Bamboo2 - For clarification placees are currently restricted from dealing in the stock at the moment.

"Institutional Offer and Institutional Placement
Trading Halt commences 20th Oct 2017"

Kind regards
GHF

[bamboo2] 24/10/2017 15:50

Welcome Brucie.

Looks like some of the placees can't resist a fast buck.

[brucie5] 24/10/2017 15:42

Thanks for the coverage here. I've just taken an initial position. Exciting situation, and certainly an exciting long term chart. I also like the fact that it's at a 2 year high.

[hastings] 22/10/2017 08:19

Not surprisingly I've got a few important questions to ask when I speak with management on the 31st.Extremely exciting situation that looks set to gather pace.

[buffetteer] 21/10/2017 11:00

If the market potential is US$22 Trillion p.a & HS gain 30% market share in due course ( same as Mastercards credit card share)then the future revenue potential is $20BN for HS (0.3% commission ). Our share of that is $7 Billion which , based on Mastercards PE , would be c.$140BN - roughly the same as MasterCards current valuation . So we don’t want to be selling out early or cheaply because the prize for Mastercard is colossal !!!

[wigwammer] 21/10/2017 09:25

Just to add, assuming 70+ accounts are achieved at end 2018, the transaction flow would represent less than 0.5% of overall MC flow. i.e. There are no aggressive assumptions involved

[wigwammer] 21/10/2017 08:24

They have 10 bank contracts so far, expecting to deliver $4bn transaction volume at the mid point. At 0.5% commission, that gives $20m gross margin to homesend, or $7m pa to eservglobal for their 35% holding. Put this on 20x and you get to around the current diluted market cap.But the really interesting thing is - they are expecting 70+ accounts by end 2018. Assuming similar volume per account and fee, this would imply $49m gross margin owed to eservglobal pa - and a vastly expanded valuation.No matter how you play with the numbers, ESG looks very good value pre and post dilution.

[fredahad1] 20/10/2017 15:08

Thanks GHF. I note also that Finncap go on to say...."Just a 1% share of Mastercard’s volume delivers US$100m recurring annual profit. Applying a conservative 10x multiple to that takes the valuation of that stake in the JV to $1bn.
However, given the views expressed by the Mastercard CEO and shown in its IR slide deck, we think that HomeSend is likely to be far more important than that in its product portfolio and the share of Mastercard’s business (and therefore
volumes over the platform) could be significantly greater....In practice, it is unlikely that Mastercard will allow such value to accrue to its HomeSend partners. It is clearly in its interest to make a generous offer to eServGlobal for its stake long before value builds to these levels. What that value might be is highly subjective, but a US$200m offer would set the value of ESG shares (estimated 807m post-raise) at 24¢ or 18p; a US$400m offer represents 36p, etc. As time progresses and certainty grows, such an offer would need to increase." My own comment here is that the market opportunity size that Mastercard/Homesend can address is truly telephone numbers, and Finncap seem to be wisely reining in the true potential, in their illustrative valuation. Otherwise it would all look totally incredible

[yorkiemike] 20/10/2017 14:42

Thanks for the information. It is also refreshing that existing shareholders are able to participate in this round of fund raising (like the last one at 4p). It is always annoying when IIs get the sole opportunity to profit over a relative short period at the expense of dilution to LTHs.

[doubleorquits] 20/10/2017 14:26

Cheers GHF

[glasshalfull] 20/10/2017 13:19

finnCap are indeed bullish with today's placing announcement ensuring ESG's balance sheet is considerably strengthened & that ESG are in a position to invest its c.£4.5m share into HomeSend to retain a 35% shareholding in the venture.

What is the value of HomeSend?

finnCap provide some flavour,

"Mastercard has several products and platforms to transact over (credit & debit cards / Mastercard Hub / fast ACH) but if just 1% of that US$6tn flows through its HomeSend platform at an average 0.5% commission, it would deliver US$300m annual revenue on a relatively negligible fixed-cost base (under US$20m) and see almost US$100m annual profit for eServGlobal's 35% stake.

Placing this earnings stream on a multiple of 10x to 15x, eServGlobal's stake in HomeSend would be worth something between US$1bn and US$1.5bn."

I'm sure that I'm not alone in believing that MasterCard will come calling sooner rather than later.

Another snippet highlights the potential,

"The contracts with giants like KEB Hana and Standard Chartered and others would never have been signed with such a tiny business as HomeSend were it not for Mastercard's backing. Ten banks have been signed to date, with over 70 expected to be signed by the end of 2018."

Kind regards,
GHF

[someuwin] 20/10/2017 13:18

This looks like a fantastic SIPP stock.

[hastings] 20/10/2017 12:07

There isn't one it's private, 55% owned by MasterCard 35% ESG and 10% by BICCS.

[lasata] 20/10/2017 12:02

Hastings....what is the epic code for Homesend please?

[hastings] 20/10/2017 10:33

Indeed and very, very bullish on HomeSend it is too.

[doubleorquits] 20/10/2017 10:28

Broker Update:

finnCap today reaffirms its corporate investment rating on eServGlobal Ltd (LON:ESG) and raised its price target to 20p (from 18p)

[masurenguy] 20/10/2017 08:32

Placing and dilution to raise circa £24m.

RNS Number : 1437U
eServGlobal Limited
20 October 2017

$40m Accelerated Non-Renounceable Entitlement Offer and Institutional Placement

Sydney: 20 October 2017

eServGlobal (LSE: ESG.L & ASX: ESV.AX), a pioneering digital transactions technology company, is pleased to announce an accelerated non-renounceable entitlement offer ("Entitlement Offer") and institutional placement to raise approximately $40.0 million before costs.

The Entitlement Offer will entitle each eligible holder to acquire, at an issue price of $0.15 per share ("Issue Price"), one fully paid ordinary share for every three fully paid ordinary shares held at 7:00pm (AEDT) on 24 October 2017 (Record Date) by shareholders whose address on the Company's register of members is in the United Kingdom, a member State of the European Union, Australia or New Zealand. The Issue Price represents a discount of 10 per cent. to the closing mid-market price on AIM of 10 pence per ordinary share as at 19 October 2017, being the latest practicable date prior to the date of this announcement. The maximum number of shares available under the Entitlement Offer is 213,394,663. The number of shares to be issued under the institutional placement is 53,272,003 ("Institutional Placement") to raise approximately $8 million.

As an accelerated entitlement offer, the Entitlement Offer will be conducted in two phases, an initial offer to selected institutional holders ("Institutional Offer") with all other eligible holders able to participate in a subsequent offer ("Retail Offer"). The Institutional Offer will offer 175,706,717 new shares and is expected to raise approximately $26.4 million. The Retail Offer will comprise 37,687,946 new shares to raise approximately $5.7 million. In order to minimise transaction costs and to avoid the need to publish an FCA approved prospectus for the Retail Offer in the United Kingdom and the member States of the European Union, the total consideration under the Retail Offer is lower than EUR5 million (or an equivalent amount) in aggregate.

The Entitlement Offer is not underwritten but the directors expect any shortfall under the Retail Offer to be placed with institutional investors, subject to claw back, as a part of the institutional bookbuild process. Participants in the Retail Offer will not be entitled to apply for the shortfall. The timetable for the proposed Entitlement Offer and Institutional Placement is as follows:

Event Date
----------------------------------------- ----------------
Institutional Offer and Institutional 20 October 2017
Placement
Trading Halt commences
----------------------------------------- ----------------
Announcement of results of Institutional 24 October 2017
Offer and Institutional Placement
on the ASX
----------------------------------------- ----------------
Record Date 24 October 2017
Trading resumes on an ex-entitlement
basis on the ASX
----------------------------------------- ----------------
Offer documentation and personalised 27 October 2017
entitlement and acceptance forms
sent to eligible retail holders
Retail Offer opens
----------------------------------------- ----------------
Quotation of shares issued under 30 October 2017
Institutional Offer and Institutional
Placement
----------------------------------------- ----------------
Last day to extend Retail Offer 7 November 2017
close date
----------------------------------------- ----------------
Retail Offer close 10 November
2017
----------------------------------------- ----------------
Announce results of Retail Offer 15 November
2017
----------------------------------------- ----------------
(+) Quotation of (+) securities 20 November
issued under Retail Offer 2017
----------------------------------------- ----------------
Holding statements sent to retail 21 November
holders 2017
----------------------------------------- ----------------

The dates and times in the above timetable are indicative only and refer to dates in Sydney, Australia. The Directors reserve the right to change the timetable, without notice, subject to the Corporations Act, the ASX Listing Rules and other applicable laws. Further details regarding the Entitlement Offer and the Institutional Placement can be found in the investor presentation, Appendix 3B and the notice under Section 708AA of the Corporations Act released today. Further announcements will be made as required during the Trading Halt via the Regulatory News Service for the AIM market.

This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.