Fonix Mobile Share Discussion Threads

[igoe104] 12/10/2023 14:59

Nice partnership in Ireland with RTE..

We’re delighted to announce that we’ve partnered with RTÉ, Ireland’s public service broadcaster, headquartered in Dublin to power all its mobile and telephony interactivity across their various broadcast channels.

The partnership will see us support mobile interactivity and competitions across the RTÉ portfolio, including high-profile shows such as Dancing with the Stars and The Late Late Show.

We’re thrilled to be working with RTÉ and to showcase the exciting work we’ve been doing behind the scenes to drive this partnership forward. Providing a great experience for consumers while also ensuring first-class, revenue-generating mobile payment technology is core to Fonix and our success.

Fonix’s proven track record in dominating the UK television market has been key to securing this great milestone deal, enabling our continued growth in Ireland and supporting key brands in this exciting

[red ninja] 22/9/2023 10:13

"Results for year ending 30 June 2023 (21/09/23)
Revenue in the year to 30 June 2023 rose 21% to £64.9m, driven by strong growth in the mobile payments and messaging service lines. Revenues recognised for mobile payments relate to the total commission charged to customers, including the mobile network operator (MNO) share of a transaction, with the MNO commission also recognised within cost of sales.

There has been notable growth in international markets, which has seen the launch of new services with Bauer Ireland, RTÉ (Ireland's National Television and Radio Broadcaster) and Wireless Radio Ireland, along with several smaller new clients in the Republic of Ireland. All have been delivered with minimal customisation of the existing cloud platform, which was connected to five new international mobile network operators and transacted with 16% of the adult population in Ireland during the year.

The success in Ireland has demonstrated the business's ability to scale internationally, with minimal incremental cost and they have already started to build relationships in other international markets with similar characteristics.

The year also brought notable new contracts in the UK to run interactive services for broadcasters ITV and Channel 4. Both accounts represent significant growth opportunities in FY24 and beyond.

Total payment volume, representing the cash payments processed by Fonix on behalf of customers, grew 3.5% to £268m, with particularly strong growth in the value of SMS billing transactions, offset by a 30% decline in charity related TPV.

Gross profit, which the board considers to be the business' most important financial metric, increased 13.9% to £15.1m . As was the case in the previous financial year, due to the seasonal nature of certain media clients, gross profit in the first half of the year was higher than the second. UK gross profit growth of +2% was impacted by some customers suspending campaigns following the death of HM The Queen in the first half.

Profit before tax rose 13% to £10.85m with earnings per share up 10% to 8.8p.

The operating cash inflow was stated as £11.8m with the free cash inflow £11m.

As well as onboarding and integrating services for several large new customers, the business continued to invest in new product innovations, including developing a new subscription engine for charity clients to be launched this autumn and intelligent dynamic filtering for users of their Campaign Manager product. The in-house development team has also continued to ensure platform resilience, scalability and cyber security remain fundamental to everything they do. Looking ahead, Fonix is in the early stages of broadening the suite of payment options integrated with its Campaign Manager and Checkout products, creating even greater growth opportunities with its key clients and new prospective customers.

Underlying cash far better represents the free cash flow available to the business. Underlying cash increased to £9.4m (2022: £7.8m) due to additional retained earnings less £495k cash used in share buy-backs.

Statutory cash shown on the balance sheet at the financial year end, which includes cash held on behalf of customers, can vary substantially from period to period and is particularly sensitive to the timing of passthrough outpayments for customer charity campaigns. Actual cash held increased to £20.6m (2022: £17.0m) in the year. The increase beyond the increase in underlying cash is purely timing related and attributable to a mobile network operator settling a trade receivable invoice a few days earlier than the previous year.

The final dividend was lifted 8.7% to 4.89 pence with the full year dividend payout £7.24m (FY22: £6.50m).

Outlook

New client wins from ITV, RTÉ, Channel 4 and Wireless Radio Ireland significantly underpin growth expectations in the year ahead whilst at the same time creating high barriers to entry to prospective competitors.

The Group’s serviceable market has expanded significantly in the last 12 months through direct network connectivity in Ireland, and they will continue to consider establishing further direct connectivity in other territories in future years.

The first few months of the new financial year have started strongly, with a robust run-rate of consumer activity with key customers.

Fonix considers that the market for frictionless mobile payments remains significant and continues to grow year-on-year, despite the expansion in alternative payment options such as Apple Pay and Google Pay. For the majority of Fonix customers, adding carrier billing as a payment option is largely shown to reduce checkout abandonment and increase sales, rather than cannibalising existing transactions with alternative payment methods.

Forecasts and valuation
The house broker upgraded forecasts following the July 2023 trading update. House broker forecasts for the year ending June 2024 remain for adjusted pre-tax profit of £12.4m (growth 13%) and adjusted earnings per share of 9.5 pence, which assumes growth of 6.7%. The forecast dividend of 7.8p equates to a yield of 4.0% (share price 193p, market cap £193m). For June 2025, profit is forecast to rise 6.4% to £13.2m with earnings per share up 5% to 10 pence and a forecast dividend of 8.5 pence."

bit later on

"
Compelling growth opportunity
Unless selling shareholders are well and truly pulling the wool over our eyes, which looks increasingly unlikely following continuing positive momentium since listing in 2020, Fonix continues to look cracking value. The ‘Risks Factors’ section of the admission document doesn’t reveal any less obvious risks to us, but a slowdown in major charity events would have an impact, although charity business only generates fixed service fees as opposed to transaction based revenue. While the rating has risen since we initiated coverage, it's still rare to find a profitable and fast-growing facilitator of mobile payments to be trading at 23x forecast earnings estimates (share price 193p) and also offering a 4% dividend yield.

Unlike many other new AIM listings over recent years, Fonix hasn't put a foot wrong since its IPO in the last quarter of 2020 (share price 90 pence), paying out attractive dividends along the way.

With the market for charity donations being worth over £10bn annually in the UK alone, carrier mobile payments providing a 'near-free' commission model and with Fonix's exceptional reference clients, there is a big growth opportunity here.
"

[rivaldo] 21/9/2023 11:46

Cavendish also retain their 270p target price.

[rivaldo] 21/9/2023 10:49

Cavendish now - "conservatively" - forecast 9.5p EPS, a 7.8p dividend and a £10.9m cash pile for this year.

They summarise:

"A robust investment case –

Fonix is focused upon leveraging its highly scalable, cloud-based platform to expand with existing clients and win new clients as mobile payments continue to
scale. The structural strength of the platform is demonstrated by no churn from major customers in seven years, and it is diligently expanding its market-leading technology outside of the UK when led by existing clients. The successful execution of the strategy has driven Total Payment Value (TPV) to £268m in FY23 from £125m in FY18, adjusted EBITDA to £11.6m in FY23 from £3.3m in FY18, and underlying EFCF to £9.0m in FY23. We conservatively forecast adjusted EBITDA growth of +9% in FY24 and +10% in FY25, and expect that any upside to our forecasts would benefit from strong operational gearing through to EFCF, which would be returned to shareholders through the progressive dividend policy."

[maiken] 21/9/2023 08:50

Can you tell us what the upgraded forecasts are please rivaldo ?

[rivaldo] 21/9/2023 08:40

Very good results, in line with the trading update which resulted in upgrades from Finncap/Cavendish.

A lovely 7.8p dividend for the year. Huge recurring income. Ireland is really taking off now. There are other international opportunities in the air. Even the charitable sector which declined with the economic downturn is turning positive (though given the small margins this sector is much less important than others).

Above all, the tone of the narrative is extremely bullish. In particular:

"The first few months of the new financial year have started strongly, with a robust run-rate of consumer activity with our key customers. We continue to make great progress on our strategic goals and recognise that by delivering on these objectives and nurturing recent client wins we have a great opportunity to exceed expectations."

[t-raider] 21/9/2023 07:14

A nice set of results and the divi increased.. no complaints here !

[igoe104] 21/9/2023 07:14

Excellent update, nearly 14% growth on profits and a increase in the dividend. 99% reoccurring revenues..

[vikeshm1] 10/8/2023 16:52

Was thinking might be time 2 buy at low price but stockopedia has it as potential high earnings manipulation risk. It says there are excessive accruals to assets which "may mean managers are making discretionary accounting choices to alter earnings".

i have no idea what this means or if i should be worried? It says accrual to assets index is 0.04 it should be under 0.02. Maybe some 1 could explain this and work out if it is something or nothing?

[johndoe23] 10/8/2023 11:04

Agreed. Certainly a lot of crazy prices around

[lammylover] 10/8/2023 10:14

Just added at £1.82, they have a limited amount for sale at this price. Just the market makers spooking the market into selling a few shares at daft prices. FNX now 20% below peak price of 230p following excellent results.....crazy times we live in..

[igoe104] 10/8/2023 09:56

All it takes is one decent size seller, it creates a dominoes effect,with stop losses being hit. Because no many buyers this time of year.

These are definitely worth topping up, this company is preforming well...

[johndoe23] 10/8/2023 09:34

August malaise maybe? Support at 195p gone, next stop 170p ish perhaps

[alan@bj] 09/8/2023 16:29

Ouch! what happened there?

[igoe104] 20/7/2023 15:25

Writeup from champion investor.

[rivaldo] 20/7/2023 12:22

Finncap have reiterated their 270p target price.

They summarise:

"Strong trading drives FY23 upgrades of +4-5%

In today’s trading update, Fonix has announced FY23 gross profit +5% ahead at £15.1m, adjusted EBITDA +4% ahead at £11.6m, and confirmed confidence in the group’s prospects for FY24 and beyond. FY23 TPV of £268.1m is +1% ahead of our previous forecast, the platform engaged with a record 19m customers in FY23, and customer retention has continued at 100%. Both the payments and messaging segments delivered over +16% yoy gross profit growth, and scaled gross profit as a % of TPV to 5.6% from 5.1% in FY22.

The FY23 launch in Ireland has demonstrated robust progress, with 16% of the Irish adult population already using Fonix’s platform for a payment transaction, and all three tier 1 media clients in Ireland now live on the platform. The success of the Irish operation provides an excellent blueprint for expansion into other international markets, as Fonix aspires to be the world’s leading provider of interactive services.

Following tier 1 client wins and expansions in the UK and Ireland, including ITV in March, the outlook confirms a strong revenue run-rate for FY24, with a growing pipeline of prospects across all sectors and markets. After today’s update drives upgrades of +4-5% for FY23 gross profit and adjusted EBITDA, we conservatively reiterate our FY24 forecasts at this point, and look forward to further detail at the FY23 results on 21 September.

As the platform scales, it is continuing to generate strong growth in underlying free cash flow, and the board intends to grow the dividend in line with the progressive dividend policy to pay out at least 75% of adjusted EPS. We reiterate
our target price of 270p based on 3% FY24E EFCF and dividend yield, and as Fonix continues to deliver upon the investment case by expanding with existing clients and winning new clients from a growing UK and international pipeline, we look forward to further updates on international launches, and new contract wins."

[rivaldo] 20/7/2023 07:23

Great to see the year end trading update coming in ahead of expectations - the £11.6m EBITDA compares well to Finncap's £11.1m forecast (and more than the "marginally" ahead noted in the statement imo!).

The main drivers for growth continue to gather steam, with Ireland in particular growing quickly and well ahead of expectations. The third tier 1 media client launch bodes well for the current year.

Both payments and messaging grew a very handy 16%, only held back by a decline in charity TPV which is much lower margin anyway.

And the outlook is extremely confident:

"Outlook:

With high levels of repeating revenue, a strong run-rate entering the new financial year, recent tier 1 wins in the UK and Ireland as well as a growing pipeline of client prospects across all sectors and markets, the Board continues to be confident in the growth potential for Fonix going into FY24 and beyond.

Rob Weisz, CEO, commented:

"We are delighted to announce another year of strong profitable growth. We started the financial year with an ambition to be a market leader in a second territory within two years of launch and have achieved that feat in the first year. In recent months, we have announced significant new contract wins in both the UK and Ireland, underpinning our growth expectations for the year ahead and furthering our aspiration to be the world's leading provider of interactive services.

As well as clear growth opportunities in our existing markets, we now also have a proven template for success in international markets, which we will look to replicate and announce as and when other new territories are making a meaningful contribution to our growth."

[igoe104] 20/7/2023 07:18

Very good update from FNX good double digit growth..

[starpukka] 14/6/2023 23:35

Why today's rise ? If it was due to Soccer Aid, wouldn't it have occurred earlier in the week ?

[rivaldo] 14/6/2023 15:23

Yep, continuing the upward trend since IPO in 2020 and bouncing off the, erm, quintuple bottom :o))

[igoe104] 14/6/2023 13:47

Nice jump today.

[igoe104] 11/6/2023 18:50

FNX should do well out of soccer aid tonight, lots of transactions to be processed.

[rivaldo] 18/5/2023 07:12

Glad to see FNX's EBT planning to buy in up to 250,000 shares.

I like the sound of:

"The directors believe that conducting a small buyback of shares is a good use of the Company's large and growing cash balance"

[red ninja] 06/5/2023 17:43

From Fonix's Linkedin feed :-

CARRIER BILLING SPEND TO REACH $122 BILLION GLOBALLY BY 2027, AS REVENUE EXPANDS BEYOND CONTENT PURCHASES

[igoe104] 29/3/2023 16:10

Also 99% income is of a repeating nature.

I already hold big chunk of these, but I wouldn't mind adding more, fancy these to muti-Bag over the next 10 years. Especially as they expand into loads of new territories...