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Https://masterinvestor.co.uk/equities/small-cap-round-up-featuring-fonix-mobile-winkworth-national-world/?mc_cid=854ac934f6&mc_eid=db9f9bbaf2
"Fonix Mobile (LON:FNX) – masses of potential for this year and beyond
On Thursday of next week, this group will be declaring its full year results to the end of June. We already know that that they will show a good advance on the previous year’s figures.
However, what I am looking for is a good Trading Update with the finals, pointing to a continuation of the first half performance and prompting, I hope, an upgrading in broker’s estimates for this current year.
Fonix, which was set up in 2006, provides mobile payments and messaging services for its multitude of clients across the entertainment, telecoms, media, enterprise and commerce sectors.
Based in London, it is a fast growth business which is driven by blue chip clients such as BT, Global Radio, ITV, Bauer Media, Comic Relief and Children in Need to name just a few.
When consumers make payments, they are charged to their mobile phone bill. This service can be used for donations, cash deposits, content and ticketing.
The company’s service works by charging digital payments to the mobile phone bill, either via Carrier Billing or SMS Billing. The group also offers messaging solutions.
Revenues last year will have risen from £40.1m to around £45.1m, while adjusted pre-tax profits are estimated to have increased from £7.3m to £8.4m, with earnings up to 6.9p (6.1p), and a 5.2p dividend per share.
The end July Trading Update reported strong earnings growth and expansion into international markets.
It also noted that “With high levels of repeating revenue, a strong exit run-rate for FY21, new supplier connections in international markets and a growing pipeline of client prospects across all sectors, the Board continues to be confident in the growth potential for Fonix going into FY22 and beyond.”
In late April this year the group’s shares hit 190p at one stage, before falling back to 123p on the day that the Trading Update was announced. Since then, they have been up to 170p, before easing back to 161.5p last Friday night.
At that level I rate the shares as offering a very good upside, with that 190p mark being an early price objective.
By the way, I note that the company’s brokers, finnCap, have a 200p price earmark.
Let us hope that next week’s results statement will provide the fillip to get the shares running back up again."
Good to see FNX highlighting the recent decisions by Apple and Google to allow third party payment methods on apps....with the consequent likely boost to direct carrier billing:
Https://blog.fonix.com/apple-and-google-begin-to-concede-on-app-store-payments-get-ready-to-add-carrier-billing-to-the-536d013c9987
Extract:
"The bottom line is that consumers need super slick payment models on App Stores; they will abandon their basket if the process becomes tricky. While card transactions are slow and complex, direct carrier billing involves fewer keystrokes and the mobile number is ubiquitous.
Carrier billing is already widely accepted by huge developers with the likes of Spotify, Amazon and Microsoft all using it. With the freedom to bill outside of the App Store, an increasing number of developers are expecting quick and frictionless payment options.
Get ready, the time is coming to add carrier billing into the payment mix."
Some very large trades gone through today.
I would say buys even though they’re in grey, other than the 126,000 trade.
News - confident mentions of "more growth on the horizon" and expansion in the "Transport and Mobility and Media and Broadcast sectors":
Https://blog.fonix.com/leadership-changes-for-fonixs-next-stage-of-growth-b90866349b59
"Leadership changes for Fonix’s next stage of growth
Aug 19
We’re hugely proud of our headway over the last year, which included the admission of Fonix to AIM. In the year ended 30 June 2021, the total payment volume of mobile payments grew by 10% to £233.4m, while gross profit advanced 13% to £11.3m. With more growth on the horizon, we are delighted to announce some exciting updates from the Fonix team.
With an increased focus on contactless and frictionless payments, the opportunity has never been greater for mobile carrier billing to be at the forefront of the digital payment space.
Roles and responsibilities have needed to evolve to stay ahead of our markets’ needs and to match our personal strengths; the changes can ensure continued success.
We have re-organised our Commercial unit, redefining our commercial development plans, led by Anthony Baladi, to support our ambitions in driving more merchants across our core markets. This will see a doubling of the business development team, expanding our plans in the Transport and Mobility and Media and Broadcast sectors.
With our existing client partnerships being the heartbeat of everything we do, we have also formed a dedicated Client Success and Partnerships (CSP) team which will be headed up by Steve George.
etc"
Hardly a collapse but should follow pattern of previous ST buy tips and return to where it started
looking at intraday chart price, it collapsed 9% starting from 2pm.
No news, no RNS, any idea? ty
Why the big drop (nearly 9%) today?
Continuing to move well here - encouraging to see buying this morning at the full 170p offer price.
ST's full tip on FNX is well worth reading (thanks mate) - an excellent summary showing the huge discount to peers and the growth path forward.
Looks like the dam has been breached with the share price moving up again now and buying coming in at the new full 157p offer.
There’s a pdf you can download at the bottom of the article for the full 20 page report. Looks good and hopefully make our way back up to 180 mark. This fall since ATH hasn’t been great
Unfortunately I'm not a subscriber,but at least we can see the intro to ST's article:
""Alpha small company research
Bargain opportunity to play the mobile payments boom
This modestly valued company is already highly cash generative and offers a decent prospective dividend.
August 5, 2021
By Simon Thompson
An exciting business benefitting from secular trends in the fast-growing payments industry
Cash generative and already has potential to announce a decent dividend at maiden results presentation
Since this London-based payment processing company listed its shares on Aim it has received the backing of some smart fund managers. Next month’s maiden annual results will highlight exactly why, with analysts predicting double-digit organic growth in transaction volumes, revenue, profits and new client wins.
Cash generation should be mightily impressive, enabling the board to pay-out 75 per cent of net earnings as dividends. A robust pre-close trading update indicates that these positive trends are set to continue into the current financial year, and well beyond, making this an ideal time to buy shares in this small-cap gem....."
Cheers 13martyn13, excellent news. There's only one Alpha stock tip a month, so this is quite a prestigious hat-tip for FNX. Here's a link:
https://www.investorschronicle.co.uk/alpha/2021/08/05/bargain-opportunity-to-play-the-mobile-payments-boom/
Simon Thompson has just recommended FNX as a buy, 190p target price.
Very pleased.
FNX have been rising every day this week, and are up again today on relatively small volumes - which hopefully means our seller has now been cleared.
Good to see the share price bouncing somewhat. There's every reason for confidence from here imo given:
- 7.6p EPS forecast this year, i.e a P/E of only 16.6, which is extremely cheap for the sector
- a 5.1p dividend for the year just gone, rising to 5.7p for the current year. i.e a 4.5% divi yield
- news soon about overseas expansion into Austria and then elsewhere
- 100% client retention and 13% growth in active client numbers over last year
Great new article on FNX by Martin Flitton, aka the well-respected Private Punter in the Cambridge News - I like the sound of the "multi-billion pound" markets to go for and the impending international expansion. And all on a very low P/E for the sector with a 5% plus dividend yield to boot :o))
Https://martinflitton1.wixsite.com/privatepunter/post/fonix-ticking-the-boxes-22-07-21
"FONIX - TICKING THE BOXES - 22/07/21
There was a Trading Update yesterday morning from FONIX Mobile, a fairly recent newcomer to the AIM, where having bought the shares soon after its IPO, I added further at £1.28p earlier this week.
That could perhaps have been perceived by some as a leap of faith, given that the shares had retraced from a peak of £1.90p implying that there may be something ominous on the horizon.
As it transpires, the update in this writer’s view was both positive and upbeat, suggesting that at the current price of £1.25p and with a market cap of £129m, the shares represent very good value.
With Fonix - which is a mobile payments platform business - you have a growth stock that enjoys strong cash generation with the added attraction of a progressive dividend policy in place.
The latter is providing a decent yield on the back of a total 5.2p payment for the year ended, which then moves to an anticipated 5.7p for 2022 which is somewhat rare across the space.
Yesterday’s update stated that the financials were comfortably in-line with expectations with total payment volume growing by 10% to £233m.
Importantly, expansion has continued with no churn experienced and it now has over 100 active customers across sectors including media, gaming and charities.
There was also some welcome news on its expansion plans away from its core UK market, which is an area that could really assist in the growth ambitions ahead.
This sees Fonix revealing that it has established its first overseas operator connections with a pending launch in Austria which should be followed by another European territory relating to service launches.
Looking at the last in depth FinnCap note, the adjusted EPS figure for the coming year 2022 is currently set at 7.6p which sees the stock trading on a forward PER of 16, which looks very good value for a growing company that is seemingly well placed to extend its footprint.
etc"
Up 6p today, and moving up each time on any decent buying. Looks like our overhang has cleared.....
Very good review of FNX on Investors' Champion (though most of it's behind a firewall) - "cracking value".....
Https://www.investorschampion.com/channel/blog/an-exciting-new-fast-growing-arrival-on-aim
"Fast-growing arrival on AIM from 2020 is still looking good
21/07/2021 · Fonix Mobile (FNX)
This fast growing new arrival on AIM from October 2020 still looks cracking value and even promises an enticing dividend yield. Buy now while it's cheap!
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 2021 (over a period when many businesses haver struggled) its team of 30 or so talented individuals based in London have grown revenues 12% to £45m and profits by 15% to just over £8.4m, resulting in an attractive operating margin of 19% and 160% return on capital. It has the added attraction of an extremely cash generative operating model which we cover in more detail below......
agreed ! big buy imo
Today's year end trading statement is comfortably in line with Finncap's forecasts. I'm happy with that.
Finncap have retained their 200p target price.
With 7.6p EPS forecast for this year FNX are on a very low P/E for the sector - especially given "100% client retention, with over 99% of income of a repeating nature".
The outlook is confident:
"Outlook:
With high levels of repeating revenue, a strong exit run-rate for FY21, new supplier connections in international markets and a growing pipeline of client prospects across all sectors, the Board continues to be confident in the growth potential for Fonix going into FY22 and beyond."
With a 13% increase in customers - and no attrition as usual - plus international expansion in Austria, with more still to come imminently, and all divisions growing nicely, FNX's long-term prospects look very good imo. I've added a few more this morning.
News item yesterday indicating FNX's interest in Direct Carrier Billing (DCB) for the e-scooter market:
Https://blog.fonix.com/carrier-billing-a-frictionless-and-ubiquitous-solution-for-e-scooters-c4c87d0221b5
Really surging and bouncing back this week. Had fallen from the highs - probably a few bored investors profit-taking, maybe a few stop-losses being breached. Given the excellent outlook in the interims and the potential it's not surprising to see the return to form.
More new highs now after the excellent rise yesterday.
Thanks for this info Rivaldo. If Fonix can get an angle in on this then it will be a great money maker.
Mark.
News dated 12/4/21 - looks like terrific potential:
The future of direct carrier billing in ticketing and transport
Fonix attended the Intelligent Transport Ticketing and Payments Innovation summit this year, alongside Transport for London, First Transit, Scheidt & Bachmann and more, to understand the trends and changes that have taken place in the last year in response to the pandemic and the future of the transport sector.
Contactless payments are an important element of ticketing, it speeds up a purchase and improves the efficiency to reduce congestion. The topic of cash becoming an increasingly obsolete method of payment was a recurring theme in this year’s webinars. LittlePay’s panel session discussed the requirements for change in the post-Covid-19 era and gave insights to contactless, with data showing that usage of contactless payments has doubled between February 2020 and 2021.
This is where direct carrier billing has an opportunity to develop the transport industry’s payments, ideally suited to the ticketing model in light of developments for cashless and touchless purchases, a simple innovation that centralises the billing system and the user journey to one device. By enabling an NFC or QR code to trigger a payment, or simply adding direct carrier billing within an app, the charge is made within the device and charged to the users’ phone bill.
Another key topic discussed was collaborative systems for multimodal transport, allowing cities to have one system to manage their entire transit ecosystem; one solution used universally to travel via bus, tram, train and e-mobility networks, culminating into one central system. This promotes public transport as a total solution to help drive people from their cars to a more simple and effective movement system. Bundling enables clarity for the individual user, making multimodal transport far more attractive by introducing a daily cap that can cover all forms of transit within a set boundary. The ‘Oyster’ in London, supported by Transport For London is an example, where the underground, overground and bus system can all be paid for with a simple contactless Oyster card.
Direct carrier billing fits this centralised model, allowing the entire ticketing and billing flow to be focussed on the mobile phone, a device which is now almost universally owned. Even those who are deemed unbanked or underbanked tend to have a phone for contact and whether a PAYG or contract phone, direct carrier billing charges can be made which opens up transit to more people. A consolidated solution for all modes of transport, all within the mobile phone, as opposed to having a separate card for contactless gives greater span for travel on both a national and international scale.
Https://blog.fonix.com/the-future-of-direct-carrier-billing-in-ticketing-and-transport-f619bda34f09