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Wealth Column: Flexiroam Initial Public Offering (IPO)

Wealth Column: Flexiroam Initial Public Offering (IPO)
Jun 04, 2015 By Tim Morris

Flexiroam is currently focusing on its Australian Initial Public Offering (IPO).

Australian’s appetite for overseas travel has witnessed significant growth over the past two decades. Short term international departures have increased at more than four times the rate of general population growth. There were more than nine million departures recorded in 2014, representing approximately 40 for every 100 Australian’s. By that measure, the nation’s appetite for travel is approximately twice as strong as the US, but around half as much as that witnessed in the UK. International departures represent around 20 for every 100 US residents; rising to 90 out of every 100 in the UK.

To contend with an exchange rate that has weakened approximately 20-30 per cent versus the US Dollar and British Pound, Australian’s travelling overseas may enhance their purchasing power through more efficient mobile communications. Historically, the market for international mobile roaming services has lacked competitiveness, forcing travellers to rely on locally purchased calling or sim cards in order to avoid “bill shock” from exorbitant roaming rates.  

The coming listing of Flexiroam aims to inject a competitive alternative for travellers. Specialising in the delivery of independent mobile roaming services, the Company’s principal asset is intellectual property associated with the Flexiroam Tracking System, which supports international mobile communications independent of carrier roaming networks. Patent applications for the Flexiroam Tracking System have been lodged in Malaysia, where the technology was founded in 2011. Flexiroam presently serves customers originating from eight outbound markets and 200 destinations.

Proceeds from Flexiroam’s Initial Public Offer are earmarked for marketing and further development of its services. Flexiroam intends to accelerate expansion beyond its core Malaysian market, with retail outlets planned for Singapore, Thailand and Indonesia to complement existing online sales channels.

Flexiroam reported revenues in the order of $3million for 2014, and evidence of sustained sales growth from current levels is critical for building investor interest. As the Company has yet to reach a self funding position, uncertainty surrounding ongoing capital requirements and medium term competitive barriers are the major risks.

Company: Flexiroam Ltd
ASX Code: FRX
Shares on Offer: 60m
Listing Price: $0.20
Market Capitalisation: $39million
Listing Date: June 16th  

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Tim Morris Author: Tim Morris Jun 04, 2015

Having studied Commerce and Science at the University of New South Wales, Tim began his career in an analytical capacity with Wise-owl. Tim has conducted over 500 corporate valuations and appraisals, specialising in pre revenue assets and emerging markets. For the last five years, his Equity Capital Market insights have been featured as part of a weekly column in The Australian and regularly features on Sky News, CNBC, ABC and Bloomberg TV.

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