Crowd Mobile (ASX:CM8, ETR:CM3) is set to post a record year following the acquisition of Netherlands based payments company Track Holdings.
On a pro forma basis combining both Cm8 and track Holdings, both companies would have generated a total of $43.1m in revenue during FY15 and EBITDA of $13.8m. This compares to revenue of $13m and EBITDA of $2.1m for just Crowd Mobile.
CM8 expects the synergies of the acquisition to flow through in FY16 as the company achieved revenue of $4m in November which is already 30% of the total revenue achieved in FY15.
Crowd Mobile has a total reach into 50 countries globally and generates 88% of its revenue overseas. The company is set to benefit from any further depreciation of the AUD versus a basket of foreign currencies. CM8 has offices in Amsterdam, Berlin and Budapest and is headquartered in Melbourne.
In October the Company completed a $12.7m rights issue which was required to complete the Track Holdings acquisition that was announced earlier this year.
In June 2015 Wise-owl upgraded its valuation for CM8 following the acquisition of Track Holdings. The Track acquisition represents a transformational deal for Crowd Mobile, adding to the Company a strong earnings growth history and immediate scale.
Wise-owl subscribers have already enjoyed healthy returns from our recommendations and we expect ongoing demand for its share price as the benefits of the acquisition start to materialise. CM8 is one of the few small-cap tech companies that manages to generate positive cash flow and is profitable since 2009.
For FY16 CM8 aims to increase the reach of its global m-payment exposure by expanding into new regions as well as rolling out new apps to drive organic sales growth. Another focus will be on establishing new partnerships and potentially acquiring strategically relevant partnerships if applicable.
Author: Simon Herrmann
Dec 03, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.