Fonix Share Discussion Threads

[74tom] 27/9/2024 20:57

You can get them via a research tree subscription.

They are conservative forecasts, however that comes with the territory for a company which has had 8 consecutive upgrades since IPO.

FY25 EPS is forecast as being 10.9p, just 0.2p higher than FY24. Some of this is due to the forecast interest income reduction. Still, even at tonight's 210p close FNX is trading on a PER of 19x

When it IPO'd back in late 2020 it was valued at 15x FY20 PE, so that would be the entry level I'd be looking for if we get an AIM budget crash, which is equivalent to ~163p.

IMO dry powder is the best investment you can have this side of 30th October.

[gopher] 27/9/2024 16:20

Does anyone have a link to the cavendish report which seems to be part of the cause of damage done to the share price

[igoe104] 27/9/2024 12:52

Interesting to hear that the CEO is on a low wage for a man of his position and his main incentive is the share price going higher...

[wjccghcc] 27/9/2024 12:51

johnDoe they are. Look at AMS, BOKU, CRW, GBG, HVO, MAB1, NICL, PCIP, PMU, RST, SAA, SPA for a start. All have Octopus as a large shareholder.

[igoe104] 27/9/2024 12:39

Judith Mckensie talks about FNX in this interview. About 23 minutes in..

[lammylover] 27/9/2024 12:11

Volume today is low, market makers just using fear in the markets to drop the bid hard, whenever anyone sells, causing a cascade effect. Then when buyers arrive, they still keep the bid low eg 207p when they are paying 209.5p) so that the headline 5.39% drop looks the same, in order to rattle more holders.. Its just a game to shake out loose shares from weak hands. MMs will walk FNX back up gradually....as this is one of the best AIM shares out there in terms of delivering results and dividends.

There's going to be loads of massive buying opportunities on many good and not so good AIM shares over the next 5 weeks before the Autumn statement. PIs and those holding AIM in IHT funds are all worrying what will happen and it just takes a few shares sold and prices tumble. MMs taking advantage of cheap shares, but also low liquidity in the market. Its certainly a buyers market, its just a case of what and when you buy and at what price.

I'm sitting on more cash than I normally do, to buy bargains when I see them...however catching a falling knife at present, springs to mind!

[johndoe23] 27/9/2024 11:27

If it was just IHT selling, why aren't loads of AIM shares getting smacked? Still think there's a substantial seller in the background

[wjccghcc] 27/9/2024 11:20

It will be AIM IHT selling as these are a reliable AIM performer so likely to be in many IHT portfolios.

Going to be some good bargains around in the next month or so.

[red ninja] 27/9/2024 11:08

I'm thinking fears of Capital Gains Tax rises and associated moves against inheritance and pensions.

They say it's against those with broad shoulders, but they are hitting my pension fund and yes they are not hitting MP's guaranteed pension funds.

Also talking down the UK economy and saying the NHS is broken at every opportunity is not helping.

[cormask] 27/9/2024 11:07

Totally agree, pretty much given up now on uk stocks.

[johndoe23] 27/9/2024 10:59

This is a farce

[johndoe23] 26/9/2024 14:43

Reckon those forecasts are way too low

[74tom] 26/9/2024 14:22

Have watched the book closely here over the past week and it looks like it's being de-rated by the market makers. There has been some chunky sells, however nothing that material vs the buying that has come through. There just seems to be little appetite to raise the bid.

Interesting to see whether long term support holds at around 2.15 if it gets there.

Stripping out the £1.1m interest income (which Cavendish are pretty much eliminating from their forecasts by FY26 anyway), this is trading at a PER of 22 with forecast EPS growth of 6% this year and 8% next year, so it's a punchy rating for not much growth.

How much revenue could Portugal realistically drive? It's one of those questions that would be perfect for an investor meet company if they thought it was worthwhile engaging with their shareholder base...

[lammylover] 26/9/2024 11:53

Oops my error £2.257!!

[rivaldo] 26/9/2024 11:48

That was a bargain at £1.25 Lammylover :o))

[johndoe23] 26/9/2024 11:43

What's the EPS forecasts anyone please?

[lammylover] 26/9/2024 11:40

Agree rivaldo. I've just taken the opportunity to add some more at £1.257

[rivaldo] 26/9/2024 11:12

Look at the long-term chart and notice the series of drops and then higher highs. I'm happy to relax and wait for more good news from this quality company whilst the market sorts itself out.

[johndoe23] 26/9/2024 10:55

Poorly timed add on my part. If I'd realised it was hard to buy because of a ST tip, wouldn't have done

[lammylover] 26/9/2024 10:41

There was a constant seller of 10k blocks. Any buys were being sold into over last few days. Hopefully out soon. I'd expect some more buyers tomorrow (Friday) and Monday as the hard copy of Investors Chronicle attracts some fresh money...
To be fair any trading update on AIM shares tends to drop them back, unless ahead of expectations. A solid buy here and opportunity to buy more at a lower price.

[johndoe23] 26/9/2024 09:46

Puzzling to see this dropping. Assume there is ab overhang, looks like sell orders being worked

[melton john] 25/9/2024 06:41

That's exactly right bamboo, the signal, red, lags the macd, blue. The other one I'm sure the names are swapped.

[bamboo2] 24/9/2024 19:42

MJ, this is the chart using ADVFN's interactive offering.
The inputs are mid price based.
The MACD is definitely different to that in the header.
Is this more like your Stocko chart?

[lammylover] 24/9/2024 11:53

Covered by Simon Thompson again this morning in Investors Chronicle

"Fonix's international expansion presents a repeat buying opportunity"

Simon Thompson: A mobile payment technology group delivering double-digit growth looks set fair as it taps into more overseas markets
Fonix's international expansion presents a repeat buying opportunity.


"Mobile payment technology group Fonix Mobile (FNX:232p) flagged up its record annual results in a pre-close trading update when the directors upgraded their earnings guidance. House broker Cavendish pushed through mid-single-digit earnings upgrades at the time (‘Fonix’s earnings upgrade cycle is far from over’, 22 July 2024).

Founded in 2006, Fonix’s core activity is offering a mobile payments service that enables merchants to charge customers for products or services (mobile ticketing, gaming, parking, dating, charity donations), turning the mobile device into a cash register while offering convenience for consumers. The London-based group has a blue-chip client base heavily weighted towards the media sector, the segment accounting for nearly 80 per cent of last year’s gross profit of £17.9mn.

The double-digit increase in transaction volumes processed in the 12-month trading period was driven by a combination of domestic growth and international expansion. Fonix has successfully cracked the Republic of Ireland, having launched services less than 24 months ago with Bauer Ireland, RTÉ (Ireland's National Television and Radio Broadcaster) and Wireless Radio Ireland, along with several smaller clients in the country. For instance, Fonix’s live broadcaster voting services support Eurovision voting across both the UK and Ireland, along with RTE’s telephony voting services.

The customer-led roll-out in Ireland is being used as a blueprint for low-risk expansion into other well-regulated overseas territories. Expansion into the Portuguese market is imminent, having been initiated by one of the group’s multinational media clients with a strong presence in the country. Fonix has developed a robust pipeline of potential clients across both TV and radio broadcasters and plans to start processing transactions in Portugal ahead of the Christmas trading period. The international segment accounts for 12 per cent of group gross profit, a weighting that can only increase as more overseas markets are targeted.

Total payments volume up 13 per cent to £303mn
Annual revenue up 17 per cent to £76mn
Full-year pre-tax profits up 27 per cent to £14mn
21 per cent higher earnings per share (EPS) of 10.8p
Dividend per share hiked 14 per cent to 8.3p
Mobile payment technology group Fonix Mobile (FNX:232p) flagged up its record annual results in a pre-close trading update when the directors upgraded their earnings guidance. House broker Cavendish pushed through mid-single-digit earnings upgrades at the time (‘Fonix’s earnings upgrade cycle is far from over’, 22 July 2024).

Founded in 2006, Fonix’s core activity is offering a mobile payments service that enables merchants to charge customers for products or services (mobile ticketing, gaming, parking, dating, charity donations), turning the mobile device into a cash register while offering convenience for consumers. The London-based group has a blue-chip client base heavily weighted towards the media sector, the segment accounting for nearly 80 per cent of last year’s gross profit of £17.9mn.

The double-digit increase in transaction volumes processed in the 12-month trading period was driven by a combination of domestic growth and international expansion. Fonix has successfully cracked the Republic of Ireland, having launched services less than 24 months ago with Bauer Ireland, RTÉ (Ireland's National Television and Radio Broadcaster) and Wireless Radio Ireland, along with several smaller clients in the country. For instance, Fonix’s live broadcaster voting services support Eurovision voting across both the UK and Ireland, along with RTE’s telephony voting services.

The customer-led roll-out in Ireland is being used as a blueprint for low-risk expansion into other well-regulated overseas territories. Expansion into the Portuguese market is imminent, having been initiated by one of the group’s multinational media clients with a strong presence in the country. Fonix has developed a robust pipeline of potential clients across both TV and radio broadcasters and plans to start processing transactions in Portugal ahead of the Christmas trading period. The international segment accounts for 12 per cent of group gross profit, a weighting that can only increase as more overseas markets are targeted.

High operational gearing

The other major benefit of scaling up international operations is that Fonix has a relatively fixed cost base and a highly scalable technology platform, so it benefits from high operational leverage in a positive revenue cycle.

In fact, more than 80 per cent of incremental gross profit earned in the 12-month trading period dropped through to operating profit. Moreover, the low capital requirements of the business mean the group is a prodigious cash generator. Underlying cash, which excludes cash held on behalf of customers increased a fifth to £11.3mn, and that’s after making £2mn of share buybacks in April 2024 and paying out £7.5mn in dividends. Interest income trebled to £1.1mn in the period, too.

Even allowing for increased capital spend in the current year, and lower finance income as interest rates fall, the group is still forecast to generate free cash flow of £10.1mn (10.1p), a sum that comfortably covers house broker Cavendish’s payout estimate of 8.8p, which underpins a 3.6 per cent prospective dividend yield. This is based on a conservative-looking pre-tax profit estimate of £14.3mn, which offers ample scope for upgrades as the new financial year progresses.

Admittedly, Fonix’s progress has not gone unnoticed as the shares have delivered an 84 per cent total return since I initiated coverage and now trade on a price/earnings (PE) ratio of 21 (Alpha Research: Bargain opportunity to play the mobile payments boom’, IC, 5 August 2021). However, management’s track record is mightily impressive and the international growth strategy is being executed well, so it’s a price worth paying. Cavendish’s 300p target price is not unreasonable and recent profit-taking is a repeat buying opportunity. Buy.

[kirkie001] 24/9/2024 10:47

Hi Bamboo - the rolling RNS news link that shows the last 5 RNS's or so.... Cheers! ;)