Fonix Mobile Share Discussion Threads

[hydrus] 29/3/2023 16:05

I don't think just looking at the numbers is sufficient to understand whether this is expensive and or good value.Fonix become completely embedded in the commercial ventures of their clients, generating new revenues that were not there before they helped them. This is the reason they never, ever lose major clients. Management are conservative and expanding carefully. I believe this is a sustainable, high quality business and it will do well for many years. It looks cheap to me because of those reasons.

[igoe104] 29/3/2023 15:54

Adam its down to seasonality of the trade of the significant media customers. Thats why they are first half weighed...

These look a solid investment , as the world adapts to more mobile payments plus FNX have lots of global markets to aim for..

They have just entered Austria, Germany , Ireland..

[igoe104] 29/3/2023 15:27

Good writeup up here.

[adamb1978] 29/3/2023 09:03

Hi

Can someone remind me here of seasonality in this business? I previously held but can't find it in my notes. Reason for asking is that H2 has been lower than H1 in the last two financial years and trying to get a handle on FY23 outturn. Valuation feels warm at something like 20x PE and 15x EBITDA and <5% FCF yield, but trying to confirm that view.

Adam

[igoe104] 27/3/2023 20:07

FNX talked about as a possible muti- Bagger by Chris broxell
(about 17 minutes in)

[rivaldo] 23/3/2023 08:29

Gone ex-div today which explains most of the early markdown.

[rivaldo] 21/3/2023 11:07

Interesting that in their new presentation ro analysts on Research Tree the CEO talks about international partnerships in Austria and Germany - I was unaware of (or had forgotten!) the latter.

And in addition to the two "tier 1" clients who've now gone live in Ireland, one more should go live in the next 12-18 months which would leave FNX "dominant in that space".

[starpukka] 15/3/2023 15:57

Having re-entered @ 198, I have done something I rarely do and averaged down; buying further @ 193.

[rivaldo] 15/3/2023 09:09

Investors Champion are also very keen on FNX - subscription only though:



"Mobile payments specialist continues to impress
13/03/2023
Fonix Mobile (FNX)

This fast growing mobile payments specialist has announced excellent interim results. This business has delivered fabulous returns since arraiving on AIM in 2020. With an enticing dividend yield, on top of the strong growth potential, it remains an exciting one to follow as you can discover below.

Founded in 2006, with a track record of strong growth and profitability, Fonix Mobile (LON:FNX) is a UK focused mobile payments and messaging company.

For its last full financial year ending June 2022 (over a period when many businesses struggled) its small team of 40 or so talented individuals based in London grew revenues 12% to £53.6m and profits by 16% to £9.7m, resulting in an attractive operating margin of 18% and an even more compelling 120% return on equity. It has the added attraction of an extremely cash generative operating model, which we cover in more detail below....."

[rivaldo] 14/3/2023 22:21

Tipped tonight by the IC's Simon Thompson (I suspect he's following me around my favourite companies as yesterday he tipped MWE too!):

[starpukka] 14/3/2023 11:25

Re-entered today @ just under 198

[rivaldo] 13/3/2023 15:00

FYI here's today's Finncap investment summary and rationale for their 270p target price:

Extracts:

"Strong H1 23 with +12% gross profit and +18% DPS growth

Fonix has announced strong H1 23 results, with +12% gross profit growth, +12% adjusted EBITDA growth, and underlying net cash of £8.4m due to EFCF of £5.1m. Commercial customers have driven mobile payments and mobile messaging growth of +13% and +18%, and gross profit as a % of TPV has increased to 5.7% from 5.1% in H1 22 due to lower charity volumes.

The 3 March ITV announcement makes Fonix the de facto SMS interactive services partner for broadcasters in the UK, and it is focused on becoming the leading payments partner for all broadcasters in Ireland in the next 18 months, following a second tier-1 broadcaster win and Irish mobile network operators experiencing levels of payments growth that have never been seen in the market.

Firm control of operating costs has enabled adjusted EBITDA growth of +12%, including investment in further international expansion, upgrading the infrastructure to double the platform’s peak capacity to over 5,000 transactions per second, and scaling the sales team. 83% of adjusted EBITDA has converted to underlying EFCF of £5.1m, which has driven net cash to £8.4m after the final FY22
dividend payment of £4.5m. The board’s confidence has enabled an +18% increase in the interim DPS to 2.36p, and the outlook confirms that trading is comfortably in line with expectations.

After we upgraded FY24 gross profit and adjusted EBITDA by +3% on 3 March, we increase FY23 EFCF by +2% due to lower working capital, and conservatively reiterate our remaining forecasts and target price. As Fonix continues to deliver on the investment case, we look forward to further updates on international launches, new contract wins, and FY23 results in September."

"Valuation

- We value Fonix at 270p based on 3% FY24 EFCF and dividend yield, and it is currently trading on 17x 12-month forward EV/EBITDA with +12% NTM EBITDA growth, 4% EFCF yield, and 3.5% dividend yield.
- Fonix’s listed peers are currently trading on 8-19x EV/EBITDA with -2% to over 100% NTM EBITDA growth, and average EFCF yields of 2-4%.

We value Fonix at 270p based on 3% FY24 EFCF and dividend yield, and it is currently trading on 17x 12-month forward EV/EBITDA with +12% NTM EBITDA growth, 4% EFCF yield, and 3.5% dividend yield".

[kalai1] 13/3/2023 12:51

Fonix Mobile plc posted solid Interims for the HY to December 31st this morning. Revenue was up 14.7% to £32.8m, adjusted EBITDA up 12.7% to £6.2m and adjusted EPS up 11.4% to 4.9p. The outlook appears to be equally solid, performance is comfortably in line with expectations and the business has a strong pipeline of opportunities going into the second half of the year. Valuation looks a little unhelpful with forward PE ratio at 22.6x after a 12-month rally. The share price also appears to have entered a correction in March, it remains to be seen how long it lasts. There is no rush to buy here, but the business has a solid b/s and is focused on delivering more growth and profitable growth. Certainly worth monitoring for the longer run...

...from WealthOracle

[rivaldo] 13/3/2023 07:22

Excellent H1 results out today - it looks to me like expectations for the year will be beaten.

FNX achieved 56% of forecast EPS for the year in H1, leaving only 44% to be achieved in H2, so even with a slight H1 weighting there's a high probability that current forecasts are undercooked.

FNX are well financed with £8.4m net cash, and the optimism about the pipeline of new work and the general H2 outlook is encouraging. The H1 results from the growth in Ireland look great:

"by their own admission, since connecting Fonix, Irish mobile network operators are experiencing levels of growth never seen in the market before"

And the operational highlights are worth repeating, particularly the spectacular recurring/repeating income:

" -- Record levels of commercial trade were achieved in December, including 85 million SMS messages processed in a single month.

-- A second, tier 1 media went client live in the Republic of Ireland, our first international market.

-- Significant upgrade of technical infrastructure, doubling the peak capacity of key Fonix products.

-- Fonix continues to maintain high client retention, with over 99% of income of a repeating nature.

-- 100% platform uptime in the period.

-- Fonix's key service lines of payments and messaging have each grown in the Period and the business retained a growing pipeline of enterprise prospects going into H2 FY23.

Post Period End

-- ITV Plc, the leading UK TV broadcaster, has agreed to gradually extend its commercial partnership with Fonix to include SMS billing payments, alongside the existing relationship for carrier billing and charity services."

[rivaldo] 03/3/2023 08:59

Finncap have today raised their target price here to 270p.

[igoe104] 03/3/2023 08:23

Definitely a share to hold for many years this share, good growth prospects, (especially across Europe,) good dividend policy, and I wouldn't be surprised to see them taken over by someone like BGO...

[mammyoko] 03/3/2023 08:22

Isn't this the key comment?

The extended commercial relationship will underpin Fonix's existing growth expectations for the years ahead.

i.e. all of the forecast growth is now in the bag? FinnCap are only adjusting 2024 conservatively by +3%

[hydrus] 03/3/2023 07:34

Yep what a great company it keeps delivering

[dicktrade] 03/3/2023 07:27

Assuming that this morning’s news (see above) could be exceptional??

[hastings] 03/3/2023 07:19

Yes, very good news indeed, onwards and upwards.

[red ninja] 03/3/2023 07:17

It's an exciting growth prospect.

[rivaldo] 03/3/2023 07:06

Terrific news - this feels like a biggie.

The key extract is:

"The extended commercial relationship will underpin Fonix's existing growth expectations for the years ahead"



"Extended broadcaster partnership

ITV extends mobile interactive services partnership with Fonix

ITV PLC, the leading UK TV broadcaster, has agreed to gradually extend its commercial partnership with Fonix to include SMS billing payments, alongside the existing relationship for carrier billing and charity services. The extended commercial relationship will underpin Fonix's existing growth expectations for the years ahead.

The deal will see Fonix continue to support all mobile carrier billing across the ITV competition portal and gradually extend to supporting all competition interactivity for its on-air formats including high profile shows such as Dancing on Ice, Good Morning Britain, Lorraine, ITV Sport, Love Island and This Morning.

Fonix will provide mobile operator payments alongside data analytics for competitions and interactive broadcast services, through Fonix's Campaign Manager platform, enabling viewers to interact and engage with their favourite TV shows, supporting ITV's ability to deliver an increasingly value-added TV experience.

Ann Cook, Director of Interactive and Managing Director of ITL, ITV, said: "Over the last five years, we've enjoyed a great working relationship with Fonix, with the team always delivering an excellent service both technically and operationally. We look forward to working more closely together to grow our business and look at new opportunities that may come from this new partnership."

Rob Weisz, CEO of Fonix, added: "We're thrilled that all of the hard work at Fonix has enabled us to deliver a growing and closer relationship with ITV into the future. Mobile interactivity and payments have always represented a great opportunity to extend the viewing experience for broadcasters from an engagement and monetisation perspective and we're delighted to be supporting ITV with their strategy in this space.

As a business, we've always taken great pride in the quality services and support that we're able to deliver for major brands and broadcasters like ITV, so it's fantastic to have that recognised with this partnership."

[rivaldo] 28/2/2023 11:09

New all-time highs now.

[rivaldo] 27/2/2023 14:57

FNX handled the mobile interactivity and text-to-win competition at the 2023 Arenacross British Championship at Wembley Arena last week:

[igoe104] 18/2/2023 11:34

Fund manager R Brown talking about FNX about 12 minutes in...