Boku flags bumper year after solid first half
By Josh White
Date: Tuesday 20 Jul 2021
(Sharecast News) - Mobile payments and identity technology company Boku updated the market on its first half on Tuesday, saying that group Revenues the period were expected to be at least $34m (£24.94m), making for a year-on-year increase of 37%.
The AIM-traded firm said underlying group revenue growth was "strong" for the six month period ended 30 June at 21%, excluding acquired Fortumo revenues).
Group adjusted EBITDA was expected to be at least $9.6m, meaning growth of 50% over the first half of 2020, with the board adding that both group revenue and adjusted EBITDA for the full year were now anticipated to be ahead of expectations.
It said group cash totalled $48.6m at period end, up from $36.2m a year earlier, with the company confirming it had paid down $11.25m of the $20m debt used to acquire Fortumo.
The firm's average daily cash balance - a measure which "smooths out" the effect of carrier and merchant payments - was $38m in June, compared to $25.7m a year earlier.
"We are pleased with the first half results, with revenues and EBITDA expected to be well ahead of the same period last year," said chief executive officer Jon Prideaux.
"With both identity and payments showing strong growth, and with group revenue and EBITDA both running ahead of expectations, there is much to be pleased about.
"Results look backwards to past achievements, but, looking forward, I am even more excited about our prospects."
Prideaux said the main task of the payments business had "always been" to help merchants reach mobile consumers, adding that it was now broadening its range of payment methods to include direct carrier billing, as well as 'e-wallets' and real-time bank payments.
"Building out this network of 'mobile first' payment methods and simplifying its implementation to be more plug-and-play unlocks an opportunity which could be many times the size of our current business.
"By first cross-selling into our existing digital merchants, then expanding our scope to cover new sectors, such as digital booking services and ecommerce, we can increase the value of transactions that we process.
"We will be investing in both our product suite and in sales and marketing in the second half and into 2022 to take advantage of the many opportunities available."
The acquisition of Fortumo in 2020 was described by Jon Prideaux as "successful", as he added that it had consolidated the company's market position in mobile payments.
"Part of the total consideration was based on Fortumo's adjusted EBITDA performance for the 12-month period ended 30 June.
"To achieve full payout of the $5.4m held in escrow, Fortumo had to achieve adjusted EBITDA significantly ahead of market expectations.
"The results have still to be finalised, but the payout is expected to be no more than 50% of the maximum amount."
The unpaid escrow balance would be returned to Boku, Prideaux confirmed.
"Our identity division performed strongly returning to growth with revenues up 30% in the first half and further reduced EBITDA losses.
"We are particularly encouraged by the growth in revenues from new products to new customers, primarily in Asia, as we expand the business away from its US base."
As a result, Jon Prideaux said the board now expected the identity business to show increased revenues and further reduced losses for the full year.
"With growth in both payments and identity divisions, I am confident that the full-year group performance will be ahead of expectations."
At 1100 BST, shares in Boku were up 4.88% at 172p.
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