Last close As at 05/08/2026
GBP1.08
▲ 4.00 (3.86%)
Market capitalisation
GBP309m
Research: TMT
Boku has signed a material identity data supply contract with a global mobile telecoms group. This is a crucial step in building out the scale of the Identity business, providing access to mobile subscribers in multiple countries. While we view this as a positive development for the Identity business, we have taken a more cautious approach to the timing of new merchant contracts, reducing Identity revenues and group EBITDA in FY20 and FY21.
Boku |
Building a critical mass in Identity |
Contract announcement |
Software & comp services |
5 November 2019 |
Share price performance
Business description
Next events
Analyst
Boku is a research client of Edison Investment Research Limited |
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Boku has signed a material identity data supply contract with a global mobile telecoms group. This is a crucial step in building out the scale of the Identity business, providing access to mobile subscribers in multiple countries. While we view this as a positive development for the Identity business, we have taken a more cautious approach to the timing of new merchant contracts, reducing Identity revenues and group EBITDA in FY20 and FY21.
Year |
Revenue ($m) |
EBITDA* |
Diluted EPS* |
DPS |
P/E |
EV/EBITDA |
12/17 |
24.4 |
(2.3) |
(0.03) |
0.0 |
N/A |
N/A |
12/18 |
35.3 |
6.3 |
0.02 |
0.0 |
83.6 |
47.4 |
12/19e |
52.0 |
9.3 |
0.02 |
0.0 |
71.4 |
32.2 |
12/20e |
63.1 |
17.6 |
0.04 |
0.0 |
31.9 |
17.1 |
12/21e |
73.2 |
24.9 |
0.06 |
0.0 |
20.9 |
12.0 |
Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Identity partnership signed with global mobile group
Boku has signed an agreement with a global mobile telecoms group to provide mobile identity verification services to its mobile subscribers. As part of the agreement, Boku will integrate directly with the partner’s global hub, enabling any of the partner’s mobile network operators worldwide to connect with Boku’s Identity platform through a single connection. The more operators (and hence subscribers) connected to Boku’s Identity platform, the more attractive the identity verification service becomes to merchants operating in those geographies.
Laying the groundwork for longer-term growth
The company noted that progress on Identity was taking longer than initially expected. While this contract announcement is a step in the right direction, confirming supply of identity data for Boku, we have taken a more cautious view on the pace at which the company will sign up new merchants to use its Identity service. We have reduced our FY20 Identity revenue forecast from $17m to $12m, which increases the Identity EBITDA loss from $1.5m to $4.0m and reduces group EBITDA from $20.1m to $17.6m. For FY21e, we reduce Identity revenues by $5.5m and group EBITDA by $2.8m.
Valuation: Strong free cash flow yield
On an EV/EBITDA basis, Boku is trading at a discount to peers on FY20 and FY21 estimates. On a P/E basis, it trades at a small premium for FY20 and a discount for FY21. Boku’s strong cash generation is reflected in its above-average free cash flow yield for FY20 and FY21. Confirmation of contract extensions and new merchants for the Identity business, as well as evidence of a growing contribution from mobile wallets in the Payments business, could help to close the valuation discount.
Changes to forecasts
Exhibit 1: Changes to forecasts
$m |
FY19e |
FY20e |
FY21e |
|||||||||
Old |
New |
Change |
y-o-y |
Old |
New |
Change |
y-o-y |
Old |
New |
Change |
y-o-y |
|
DCB revenues |
43.1 |
43.1 |
0.0% |
22.2% |
51.1 |
51.1 |
0.0% |
18.5% |
58.2 |
58.2 |
0.0% |
13.8% |
Identity revenues |
8.9 |
8.9 |
0.0% |
N/A |
17.0 |
12.0 |
-29.4% |
34.8% |
20.5 |
15.0 |
-26.8% |
25.0% |
Total revenues |
52.0 |
52.0 |
0.0% |
47.5% |
68.1 |
63.1 |
-7.3% |
21.3% |
78.7 |
73.2 |
-7.0% |
15.9% |
Gross profit |
44.0 |
44.0 |
0.0% |
34.3% |
57.1 |
54.6 |
-4.4% |
23.9% |
65.5 |
62.7 |
-4.2% |
15.0% |
Gross margin |
84.6% |
84.6% |
0.0% |
-8.3% |
83.8% |
86.4% |
2.7% |
1.8% |
83.3% |
85.8% |
2.5% |
-0.7% |
EBITDA |
9.3 |
9.3 |
0.0% |
47.3% |
20.1 |
17.6 |
-12.5% |
88.5% |
27.7 |
24.9 |
-9.9% |
42.1% |
EBITDA margin |
17.9% |
17.9% |
0.0% |
0.0% |
29.4% |
27.8% |
-5.5% |
9.9% |
35.2% |
34.1% |
-3.2% |
6.3% |
Normalised operating profit |
6.6 |
6.6 |
0.0% |
36.4% |
17.3 |
14.8 |
-14.4% |
124.8% |
25.0 |
22.3 |
-11.0% |
50.1% |
Normalised operating profit margin |
12.7% |
12.7% |
0.0% |
-1.0% |
25.5% |
23.5% |
-1.9% |
10.8% |
31.8% |
30.4% |
-1.4% |
6.9% |
Reported operating profit |
(3.8) |
(3.8) |
0.0% |
57.4% |
7.0 |
4.5 |
-35.5% |
-219.5% |
14.7 |
11.9 |
-18.7% |
162.8% |
Reported operating margin |
-7.3% |
-7.3% |
0.0% |
-0.5% |
10.3% |
7.2% |
-3.1% |
14.5% |
18.7% |
16.3% |
-2.4% |
9.1% |
Normalised PBT |
6.0 |
6.0 |
0.0% |
40.5% |
16.6 |
14.1 |
-15.0% |
135.7% |
24.4 |
21.6 |
-11.3% |
53.2% |
Reported PBT |
(4.4) |
(4.4) |
0.0% |
47.5% |
6.3 |
3.8 |
-39.5% |
N/A |
14.1 |
11.3 |
-19.6% |
195.8% |
Normalised net income |
4.7 |
4.7 |
0.0% |
40.5% |
13.1 |
11.2 |
-15.0% |
135.7% |
19.3 |
17.1 |
-11.3% |
53.2% |
Reported net income |
(4.4) |
(4.4) |
0.0% |
1.5% |
5.7 |
3.4 |
-39.5% |
N/A |
11.9 |
9.6 |
-19.6% |
179.4% |
Normalised basic EPS ($) |
0.020 |
0.020 |
0.0% |
27.8% |
0.052 |
0.044 |
-15.0% |
121.2% |
0.075 |
0.067 |
-11.3% |
52.8% |
Normalised diluted EPS ($) |
0.018 |
0.018 |
0.0% |
17.1% |
0.048 |
0.041 |
-15.0% |
123.6% |
0.070 |
0.062 |
-11.3% |
52.8% |
Reported basic EPS ($) |
(0.018) |
(0.018) |
0.0% |
-7.8% |
0.022 |
0.014 |
-39.5% |
N/A |
0.047 |
0.038 |
-19.6% |
178.5% |
Net debt/(cash) |
(27.3) |
(27.3) |
0.0% |
-5.4% |
(46.6) |
(43.5) |
-6.7% |
59.2% |
(72.7) |
(66.8) |
-8.2% |
53.5% |
TPV ($bn) |
5.05 |
5.05 |
0.0% |
42.5% |
6.65 |
6.65 |
0.0% |
31.7% |
7.95 |
7.95 |
0.0% |
19.5% |
Take rate |
0.85% |
0.85% |
0.0% |
0.77% |
0.77% |
0.0% |
0.73% |
0.73% |
0.0% |
|||
Source: Edison Investment Research
Exhibit 2: Financial summary
$m |
2014 |
2015 |
2016 |
2017 |
2018 |
2019e |
2020e |
2021e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||||
Revenue |
|
|
18.3 |
19.2 |
17.2 |
24.4 |
35.3 |
52.0 |
63.1 |
73.2 |
Cost of Sales |
(4.1) |
(4.0) |
(3.2) |
(2.3) |
(2.5) |
(8.0) |
(8.6) |
(10.4) |
||
Gross Profit |
14.2 |
15.2 |
14.0 |
22.1 |
32.8 |
44.0 |
54.6 |
62.7 |
||
EBITDA |
|
|
(9.6) |
(11.4) |
(12.3) |
(2.3) |
6.3 |
9.3 |
17.6 |
24.9 |
Normalised operating profit |
(9.8) |
(12.4) |
(13.8) |
(4.0) |
4.8 |
6.6 |
14.8 |
22.3 |
||
Amortisation of acquired intangibles |
(0.8) |
(1.9) |
(1.7) |
(1.3) |
(1.3) |
(1.8) |
(1.8) |
(1.9) |
||
Exceptionals |
(2.1) |
(0.1) |
(2.4) |
(2.2) |
(1.4) |
(0.1) |
0.0 |
0.0 |
||
Share-based payments |
(1.7) |
(1.8) |
(2.1) |
(1.5) |
(4.6) |
(8.5) |
(8.5) |
(8.5) |
||
Reported operating profit |
(14.4) |
(16.2) |
(19.9) |
(9.0) |
(2.4) |
(3.8) |
4.5 |
11.9 |
||
Net Interest |
(0.6) |
(0.4) |
(1.2) |
(2.4) |
(0.6) |
(0.6) |
(0.7) |
(0.6) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
(17.1) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
(10.4) |
(12.8) |
(15.0) |
(6.4) |
4.3 |
6.0 |
14.1 |
21.6 |
Profit Before Tax (reported) |
(15.0) |
(16.6) |
(21.1) |
(28.5) |
(3.0) |
(4.4) |
3.8 |
11.3 |
||
Reported tax |
(0.4) |
(0.4) |
0.5 |
(0.1) |
(1.3) |
0.0 |
(0.4) |
(1.7) |
||
Profit After Tax (norm) |
(7.8) |
(9.6) |
(11.2) |
(4.8) |
3.4 |
4.7 |
11.2 |
17.1 |
||
Profit After Tax (reported) |
(15.4) |
(17.0) |
(20.6) |
(28.7) |
(4.3) |
(4.4) |
3.4 |
9.6 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
(7.8) |
(9.6) |
(11.2) |
(4.8) |
3.4 |
4.7 |
11.2 |
17.1 |
||
Net income (reported) |
(15.4) |
(17.0) |
(20.6) |
(28.7) |
(4.3) |
(4.4) |
3.4 |
9.6 |
||
Basic ave. number of shares outstanding (m) |
21.3 |
27.4 |
140.1 |
150.3 |
217.1 |
238.7 |
254.5 |
255.2 |
||
EPS - basic normalised ($) |
(0.36) |
(0.35) |
(0.08) |
(0.03) |
0.02 |
0.02 |
0.04 |
0.07 |
||
EPS - diluted normalised ($) |
(0.36) |
(0.35) |
(0.08) |
(0.03) |
0.02 |
0.02 |
0.04 |
0.06 |
||
EPS - basic reported ($) |
|
|
(0.72) |
(0.62) |
(0.15) |
(0.19) |
(0.02) |
(0.02) |
0.01 |
0.04 |
Dividend ($) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
N/A |
4.7 |
(10.4) |
42.0 |
44.5 |
47.5 |
21.3 |
15.9 |
||
Gross Margin (%) |
77.6 |
79.1 |
81.4 |
90.7 |
92.9 |
84.6 |
86.4 |
85.8 |
||
EBITDA Margin (%) |
(52.5) |
(59.2) |
(71.4) |
(9.5) |
17.9 |
17.9 |
27.8 |
34.1 |
||
Normalised Operating Margin |
(53.2) |
(64.4) |
(80.0) |
(16.5) |
13.7 |
12.7 |
23.5 |
30.4 |
||
BALANCE SHEET |
||||||||||
Fixed Assets |
|
|
32.7 |
30.8 |
26.8 |
26.9 |
23.0 |
50.6 |
48.2 |
46.8 |
Intangible Assets |
32.5 |
30.1 |
25.7 |
25.8 |
22.5 |
47.0 |
45.3 |
43.2 |
||
Tangible Assets |
0.2 |
0.7 |
0.5 |
0.4 |
0.3 |
2.9 |
1.5 |
0.3 |
||
Investments & other |
0.0 |
0.0 |
0.6 |
0.7 |
0.3 |
0.7 |
1.5 |
3.3 |
||
Current Assets |
|
|
72.5 |
53.0 |
48.9 |
79.3 |
84.0 |
96.6 |
123.4 |
154.1 |
Stocks |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Debtors |
59.7 |
43.3 |
37.1 |
59.1 |
51.7 |
63.6 |
75.4 |
83.9 |
||
Cash & cash equivalents |
12.0 |
9.0 |
11.3 |
18.7 |
31.1 |
31.8 |
46.8 |
68.9 |
||
Other |
0.7 |
0.6 |
0.5 |
1.4 |
1.3 |
1.3 |
1.3 |
1.3 |
||
Current Liabilities |
|
|
(69.6) |
(65.5) |
(61.0) |
(78.0) |
(79.6) |
(90.6) |
(103.0) |
(111.7) |
Creditors |
(64.6) |
(60.4) |
(54.9) |
(75.5) |
(77.4) |
(86.1) |
(99.6) |
(109.5) |
||
Tax and social security |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Short term borrowings |
(5.0) |
(5.1) |
(6.1) |
(2.5) |
(2.2) |
(4.5) |
(3.3) |
(2.2) |
||
Other |
0.0 |
0.0 |
0.0 |
(0.0) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Long Term Liabilities |
|
|
0.0 |
(0.3) |
(15.2) |
(0.2) |
(0.8) |
(0.8) |
(1.3) |
(3.8) |
Long term borrowings |
0.0 |
(0.2) |
(15.1) |
(0.0) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other long term liabilities |
0.0 |
(0.1) |
(0.1) |
(0.1) |
(0.8) |
(0.8) |
(1.3) |
(3.8) |
||
Net Assets |
|
|
35.5 |
18.0 |
(0.4) |
28.0 |
26.6 |
55.8 |
67.4 |
85.4 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
35.5 |
18.0 |
(0.4) |
28.0 |
26.6 |
55.8 |
67.4 |
85.4 |
CASH FLOW |
||||||||||
Op Cash Flow before WC and tax |
(9.6) |
(11.4) |
(12.3) |
(2.3) |
6.3 |
9.3 |
17.6 |
24.9 |
||
Working capital |
9.3 |
11.6 |
(3.4) |
1.0 |
7.2 |
(3.1) |
1.7 |
1.3 |
||
Exceptional & other |
(1.6) |
1.1 |
4.2 |
(5.5) |
0.2 |
(0.8) |
(0.4) |
0.0 |
||
Tax |
(0.0) |
(0.0) |
(0.0) |
0.0 |
(0.2) |
(0.4) |
(0.7) |
(1.0) |
||
Net operating cash flow |
|
|
(1.9) |
1.3 |
(11.5) |
(6.8) |
13.5 |
5.0 |
18.2 |
25.3 |
Capex |
(1.1) |
(3.6) |
(1.5) |
(0.3) |
(0.3) |
(1.8) |
(1.3) |
(1.4) |
||
Acquisitions/disposals |
5.9 |
0.3 |
0.0 |
0.0 |
(0.2) |
(0.7) |
0.0 |
0.0 |
||
Net interest |
(0.3) |
(0.3) |
(0.3) |
(0.9) |
(0.6) |
(0.3) |
(0.6) |
(0.6) |
||
Equity financing |
0.2 |
0.1 |
0.1 |
19.8 |
0.5 |
0.4 |
0.0 |
0.0 |
||
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
0.6 |
(0.0) |
0.1 |
(1.1) |
0.2 |
0.0 |
0.0 |
0.0 |
||
Net Cash Flow |
3.3 |
(2.2) |
(13.1) |
10.6 |
13.1 |
2.5 |
16.3 |
23.4 |
||
Opening net debt/(cash) |
|
|
(4.9) |
(7.0) |
(3.6) |
9.9 |
(16.2) |
(28.9) |
(27.3) |
(43.5) |
FX |
(1.2) |
(0.8) |
(0.4) |
0.4 |
(0.5) |
(0.3) |
(0.2) |
(0.1) |
||
Other non-cash movements |
0.0 |
(0.4) |
(0.0) |
15.1 |
0.0 |
(3.8) |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(7.0) |
(3.6) |
9.9 |
(16.2) |
(28.9) |
(27.3) |
(43.5) |
(66.8) |
Source: Boku, Edison Investment Research
|
|
Research: Energy & Resources
Egdon has announced it has signed an exclusivity agreement with a large internationally recognised E&P company for UK offshore licences P1929 and P2304. The licences sit in the Southern North Sea and contain the Resolution and Endeavour gas discoveries. Resolution has been independently assessed by Schlumberger to hold mean contingent gas resources of 231bcf. Egdon has also responded to the government announcement that it will introduce a temporary moratorium on hydraulic fracturing for shale gas. The company’s unconventional acreage holds the Springs Road-1 well, which contains 640bcf of gas per square mile.