Fonix Share Discussion Threads

[rivaldo] 26/9/2021 06:26

I finally managed to read through the new 31 page note from Finncap, and thought the following extract was a nice insight into FNX's growth path for the current year:

"In FY21, Fonix has maintained its 100% client retention rate and grown its active client base to 111 from 98 at FY20 and 105 at H1 21. It has continued to demonstrate strong traction in both existing and emerging sectors such as mobility, ticketing, and dating, where it recently launched services with a multinational tech company operating thousands of online dating sites globally.

In FY22, Fonix’s client additions could further accelerate following the doubling of its sales team in early FY22 through the addition of 2 new employees, and a new partnership with a leading technology provider that could open up a considerable pipeline of opportunities in the UK and international markets.

Fonix established connectivity for its first international operation in Austria in FY21, where it could harness the deep understanding of the regulatory framework of one of its gaming customers. We expect that its launch will provide a template for Fonix’s client-led expansion into new markets, with Fonix in advanced discussions to launch services with a key customer in an additional European market, and several of its other multinational clients looking to expand Fonix’s services overseas."

[rivaldo] 24/9/2021 14:02

Good to see the share price up nicely - and with 1.3m shares traded following ST's tip any sellers should have been able to exit, leaving the stage free for further gains on re-rating and/or more news flow.

[p1nkfish] 24/9/2021 08:09

Didn't he tip PTRO too?
Market is changing.

I'm seeing a slow roll-over occuring starting in some previous darling sectors even when the results are OK. Hence been moving to cash and being more careful overall. Only stuff I am keeping are conviction companies and those that might benefit from the coming slower period and potential turmoil.

Easy pickings since end of March 2020 now taken.

Just mho, probably wrong.

[lennonsalive] 24/9/2021 07:28

Will the Simon Thompson effect give it a boost

[petewy] 23/9/2021 19:56

ST's view.

[toptomcat] 23/9/2021 16:24

Took a position here today, below the red line, in light of the story and in anticipation of ST giving it his mark of approval, which he duly did. Potential material upside to his 190p target

[adamb1978] 23/9/2021 11:41

Does anyone know why gross margins have decreased?

FY19: 26.3%
FY20: 24.9%
FY21: 23.7%

Not catastrophic, but 1% gross margin declines hits EPS by around 0.4p. Hastings - would you be possible for you to ask the company when you speak with them?

Adam

[igoe104] 23/9/2021 10:49

FNX should do well out the pay per view fight between Fury and wilder,( next month )as they process BT sports pay per view payments.

[rivaldo] 23/9/2021 10:45

Agreed spann_703.

FNX appear to me to be a high quality, growth company with terrific recurring income and customer retention - but with a good chance of acceleration of that growth via international growth, technology partnerships and customer acceleration in both numbers of clients and sales of new products.

It's worth noting that FNX describe themselves as "a fast growth business" in their company synopsis.

FNX delivered 19% revenue growth last year, and 29% the year before that. This is similar to BGO's forecast 20% revenue growth this year. BGO is valued at £160m compared to FNX's £150m, yet FNX are on a P/E of 19.7 and pay a whopping dividend, whereas BGO are on a current year P/E of 57 and (of course) pay no dividend. FNX's forecasts are specifically described as "conservative", whereas I suspect BGO's are less so.

I can see reasons why BGO should attract a higher rating, though it's currently too high for my taste. But that doesn't mean that FNX shouldn't be on a rating which is at least in a similar ball park, even if not one with a P/E of 45 or 50!

[p1nkfish] 23/9/2021 08:42

Results much as expected imho. I exited a short while back. GLA and hope it gets to the 200p soon.

[spann_703] 23/9/2021 07:26

Ok results.

Not bad enough to cause me to sell, not good enough to cause me to want to buy more.

Agreed revenue growth is good.

A steady growing, quality company priced about right sounds like an accurate description to me, Hydrus.

Personally, I'm happy to own steady growing, quality companies - so I will continue to hold and see what happens.

[apad] 23/9/2021 07:11

I like to see software costs falling, riv.
Pretty much agree, Hydrus.
Div. policy reinforces that view.
The App world seems to dominate thinking by no-nothing managers.
apad

[hydrus] 23/9/2021 07:01

I had hoped FNX would be a fast growing high quality company and get re-rated accordingly.It might actually be a steady growing good quality company and the market is probably pricing it right around this level. Re Charity clients - small beer for them so not worth focussing on. They need international growth to really grow and it's a bit quiet on that front as APAD pointed out.

[rivaldo] 23/9/2021 06:51

Finncap retain their 200p target price.

They say their forecast of 7.6p EPS for this year (with a 5.7p dividend) is "conservative", and they introduce 8.3p EPS forecast for next year (with a 6.3p dividend).

Their note is 31 pages long so very comprehensive!

Inicdentally, only £540k of software develpment costs were capitalised during the year, offset by a £375k amortisation charge. This is very small beer indeed.

[apad] 23/9/2021 06:40

An alternative view. 😊

FNX FY is respectable but not exciting. Revenue growth is good.

They quote a 50% increase in charitable customers, but I do not know how much profit they make from charities.

They are still talking about the one customer going international.

Large increase in sales staff next year.

Software costs remain high. Amortised of course 😊

They are a very expensive way to buy EBITDA.

Hold I guess.

apad

[hastings] 23/9/2021 06:34

Just to add, I now have a call lined up with Rob for next Monday, so will obviously pen something on the back of that.

[rivaldo] 23/9/2021 06:28

I'm also perfectly happy to hold here for some time to come..

The 7p adjusted EPS is slightly above Finncap's 6.9p forecast, and with 7.6p EPS forecast this year, plus a £5m and growing cash pile (up 158%), FNX are trading at far below the multiples achieved by its sector peers.

Plus of course FNX pay a very healthy dividend - today's 3.5p makes a total 5.2p dividend for the year.

The outlook is very confident, with current year trading described as having started "very strongly".

There's international expansion to look forward to being announced soon, and today we learn of new contracts recently signed with large gaming and dating companies. Other companies would surely have splashed these all over RNS's etc. This is perhaps indicative of FNX's prudent style, though I see no reason why they couldn't have highlighted them on their web site.

There's also an interesting hint to close on:

"We recognise that by delivering on these objectives and potentially winning some flagship clients from our competitors we have a great opportunity to exceed expectations."

[hastings] 23/9/2021 06:17

Agreed, very pleased with the numbers and outlook.

[igoe104] 23/9/2021 06:14

Excellent results, gaining lots of new customers and brilliant retention rate and reoccurring revenue rate. Happy to hold for years to come.

Can't understand why the share price has fallen away and not recovered over the last few days....

Also the dividend in November is not to be sniffed at...

[igoe104] 16/9/2021 15:39

Should see a nice pick up next week, as results are being announced next Thursday, which we know are going to be good.

[rivaldo] 13/9/2021 18:00

Good coverage tonight on Master Investor....



"Fonix Mobile (LON:FNX) – masses of potential for this year and beyond

On Thursday of next week, this group will be declaring its full year results to the end of June. We already know that that they will show a good advance on the previous year’s figures.

However, what I am looking for is a good Trading Update with the finals, pointing to a continuation of the first half performance and prompting, I hope, an upgrading in broker’s estimates for this current year.

Fonix, which was set up in 2006, provides mobile payments and messaging services for its multitude of clients across the entertainment, telecoms, media, enterprise and commerce sectors.

Based in London, it is a fast growth business which is driven by blue chip clients such as BT, Global Radio, ITV, Bauer Media, Comic Relief and Children in Need to name just a few.

When consumers make payments, they are charged to their mobile phone bill. This service can be used for donations, cash deposits, content and ticketing.

The company’s service works by charging digital payments to the mobile phone bill, either via Carrier Billing or SMS Billing. The group also offers messaging solutions.

Revenues last year will have risen from £40.1m to around £45.1m, while adjusted pre-tax profits are estimated to have increased from £7.3m to £8.4m, with earnings up to 6.9p (6.1p), and a 5.2p dividend per share.

The end July Trading Update reported strong earnings growth and expansion into international markets.

It also noted that “With high levels of repeating revenue, a strong exit run-rate for FY21, new supplier connections in international markets and a growing pipeline of client prospects across all sectors, the Board continues to be confident in the growth potential for Fonix going into FY22 and beyond.”

In late April this year the group’s shares hit 190p at one stage, before falling back to 123p on the day that the Trading Update was announced. Since then, they have been up to 170p, before easing back to 161.5p last Friday night.

At that level I rate the shares as offering a very good upside, with that 190p mark being an early price objective.

By the way, I note that the company’s brokers, finnCap, have a 200p price earmark.

Let us hope that next week’s results statement will provide the fillip to get the shares running back up again."

[johndoe23] 10/9/2021 07:15

Yes, some investors can't think for themselves and do whatever he says!Great prospects here imho

[igoe104] 10/9/2021 07:10

It benefits Robbie to keep switching stocks, as every time he tips one it goes up at least 15% as folks copy him.

[melody9999] 10/9/2021 06:42

Thanks John - looks like Robbie has taken a view to exit the market generally - nothing specific to FNX - prospects look good here.

[johndoe23] 09/9/2021 18:40

So the tick down at the end of the day was more than likely caused by Robbie Burns saying he had sold out of his holding in his diary...