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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".
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."
Finncap have today raised their target price here to 270p following the ITV contract expansion news.
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"
Https://uk.advfn.com/stock-market/london/fonix-mobile-FNX/share-news/Fonix-Mobile-PLC-Extended-Broadcaster-Partnership/90404324
"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."
after another rise today of 4p so far.
FNX handled the mobile interactivity and text-to-win competition at the 2023 Arenacross British Championship at Wembley Arena last week:
Https://www.fonix.com/blog/fonix-power-mobile-interactivity-for-arenacross-2023/
Finncap have today raised their target price to 260p (from 230p) and retained their prior forecasts.
An encouraging H1 update today. Active customers are up nicely, a second tier 1 media client has launched with FNX in Ireland and EBITDA is up a very satisfactory 12% (despite a charity income decline which has thin margins so has little impact).
In addition:
- there's "a pipeline of other opportunities" in Ireland
- the "upgrade of technical infrastructure had doubled the capacity of key Fonix products
And it sounds like there's news flow to come shortly on "significant client prospects":
"Fonix's key business segments of payments and messaging have both grown in the Period and the business retains a growing pipeline of significant client prospects going into H2 FY23, and we will provide more information on these with our interim results."
Above all, the outlook is "confident in the growth potential for Fonix going into H2 FY22 and beyond".
Positive trading uodate
Barclays finally "found" my FNX dividend. Only around a month late :o))
FNX loks like a share to hold and hold for the long-term as it steadily grows - all the while paying out handsome dividends unlike most of its brethren.
Happy new year to everyone here. And a good start to 2023 for FNX - looks like almost £30,000 of buys this morning already, and more all-time highs.
Barclays still haven't "found" my dividend. Unbelievable!
Nice move up to new all-time highs.
Barclays appear to have "lost" my FNX dividend and are currently looking through their bottom drawers to see where it's been filed. Great :o))
New blog post from FNX extolling the virtues of carrier billing versus credit card payments:
Https://www.fonix.com/blog/direct-carrier-billing-vs-credit-card-payments/
The buyer of £17k buy just now had to pay 198.75p, well above the published 197p offer. Promising.
Ex div today and price holding - thumbs up
Thumbs up for FNX from Paul Scott on Stockopedia yesterday:
"Fonix Mobile (LON:FNX) [quick comment] – a rare thing this one – a fairly recent float (Oct 2020) that hasn’t collapsed in price! Yesterday’s AGM trading update said it has started FY 6/2023 positively, in line with expectations. It’s planning growth from new products, and internationally, and mentions a “growing pipeline of client prospects”, and is “confident in the growth potential”. This looks an impressive company, and has very sticky clients. Paying decent divis too. Thumbs up from me. [no section below]."
Not above expectations so sp down. That’s the brutal reality of the market lately
I hold these shares and I think going ex div this week.
Should do very well for long hold and for div.
Qquietly confident and nicely in line, with "strong income growth in the Republic of Ireland":
Https://uk.advfn.com/stock-market/london/fonix-mobile-FNX/share-news/Fonix-Mobile-PLC-AGM-Statement/89608865
"With high levels of repeating revenue, strong momentum in overseas markets and a growing pipeline of client prospects across all our markets and sectors, the Board continues to be confident in the growth potential for Fonix for the rest of the financial year and beyond"
The share price had consolidated for a bit over a year so now finally made a move. I've noticed that the share volume isn't big, maybe there's just not enough sellers at this level.
Still flying. i see Kestrel Partners (CNIC)were the second largest holder a couple of years back. Not sure if they still are. Seems to be plenty of headroom for more growth
If it can go this well in todays market imagine what it will be like when the market turns bullish however long that may take!
at 190p-194p.
Been away on family hols for nigh on three weeks - great to see new all-time highs here now (even with today's small pull-back).
Here's a new video from the CEO about how mobile interactivity is changing the radio landscape:
Https://www.fonix.com/blog/fonix-focal-point-how-mobile-interactivity-is-changing-the-radio-landscape/
Absurdly mispriced compared to competitors. The lowest PE, the smallest number of shares(100 mil) , the largest revenue and pays a decent dividend. A good sector with plenty of growth . No wonder it’s creeping up still
Good to see an almost £20,000 buy just now at 168p, 1p above the 167p published offer price. Hopefully a good sign.