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Investment summary
VMob (VML) is an early-stage New Zealand-based company commercialising a unique cloud-based mobile marketing solution for global retailers. It uses big data analytics to deliver targeted rewards to mobile handsets to drive more customers into bricks and mortar stores. VML has a partnership with Microsoft and has a global contract with McDonalds and a contract with 7-Eleven Australia. Annualised Committed Monthly Revenue (ACMR) at 31 March 2015 was NZ$3.181m, up >1,700% on FY14. The FY15 result was a loss of NZ$4.4m as a result of continual investment in market building. Recent events include a 1-for-25 share consolidation and a share placement of NZ$0.40 to raise NZ$4m. Our forecasts are under review.
Last updated on 29/06/2015
Industry outlook
In an era of flagging high street sales, the objective of VML's product is to drive more foot traffic through bricks and mortar stores and to increase retailers’ profits. The advent of cloud computing, the spread of mobile devices and the availability of data have opened the door for products that provide retailers with a solution to real-time, one-to-one communications with customers. This results in personalised marketing messaging.
Last updated on 29/06/2015
I wonder if they will update
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Valuation: Exposure to volume creates upside
The current share price factors in 35 customers at an average annual revenue (ARR) of NZ$0.3m by 2017. Valuation uplift will be triggered by contract wins and increases in ACMR, which stands at NZ$2.1m following the McDonald’s Japan contract win. Because the product is early stage and there are few relevant or profitable comparable companies, we have used a DCF valuation to determine how many customers the market is paying for today. To dimension the opportunity we have included an upside case as well as our base case forecasts. Our base case assumes 43 customers by 2017 and results in a DCF valuation of NZ$0.038 ($0.95 post consolidation). The upside case assumes 51 customers and values the company at NZ$65.5m (NZ$0.052, $1.30 post consolidation).