Last close As at 05/08/2026
GBP1.08
▲ 4.00 (3.86%)
Market capitalisation
GBP309m
Research: TMT
Boku’s five-month trading update confirmed that lockdowns have resulted in increased demand for home entertainment, driving new users to Boku’s Payments business. Management is confident of meeting market expectations for FY20 and we maintain our current estimates. We note, however, that if demand from new users can be sustained there could be upside to our forecasts.
Boku |
Payments volumes +35% year-on-year |
Trading update |
Software & comp services |
10 June 2020 |
Share price performance
Business description
Next events
Analyst
Boku is a research client of Edison Investment Research Limited |
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Boku’s five-month trading update confirmed that lockdowns have resulted in increased demand for home entertainment, driving new users to Boku’s Payments business. Management is confident of meeting market expectations for FY20 and we maintain our current estimates. We note, however, that if demand from new users can be sustained there could be upside to our forecasts.
Year |
Revenue ($m) |
EBITDA* |
Diluted EPS* |
DPS |
P/E |
EV/EBITDA |
12/18 |
35.3 |
6.3 |
0.02 |
0.0 |
70.0 |
39.0 |
12/19 |
50.1 |
7.4** |
0.01 |
0.0 |
90.3 |
33.3 |
12/20e |
52.0 |
10.5 |
0.02 |
0.0 |
53.4 |
23.4 |
12/21e |
60.8 |
14.3 |
0.03 |
0.0 |
34.6 |
17.2 |
12/22e |
69.4 |
17.0 |
0.04 |
0.0 |
27.2 |
14.5 |
Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Excludes one-off revenue recognition.
Good progress year to date
Boku’s trading update for the first five months of FY20 (5M20) confirmed that good progress was made in both the Payments & Identity businesses. In the Payments business, total payment volumes (TPV) grew 35% y-o-y to $2.6bn, and monthly active users (MAUs) at the end of May exceeded 20 million (+36% y-o-y, +12% since February 2020). New users during 5M20 increased 20% y-o-y to 9.2 million. Payments deployments are at record levels, covering a wide range of countries and merchants. Live wallets processing payment transactions have increased from two in February to seven in May. The company recently reported that it has expanded the supply of data in its Identity business, and merchants (including FIS, the owner of Worldpay) are generating revenue in five countries.
Estimates maintained; Payments could drive upside
Management is confident of meeting FY20 expectations and expects to provide a half-year update in due course. While Payments volumes year to date are strong, it is unclear how sustainable these increased volumes will be once lockdowns are relaxed. In addition, COVID-19 disruption could affect future deployments and delay progress in signing up merchants for Identity services. At this point, we maintain our estimates.
Valuation: Sum-of-parts suggests upside
On EV/Sales and EV/EBITDA, Boku is trading at a discount to the average of payment processor peers and identity management peers. However, we believe that Boku’s investment in the Identity business is masking the performance of the Payments business. As the two business have different growth and profitability dynamics, we take a sum-of-the-parts approach to assign value to each separately, generating a group equity value of $388m or 119p per share (117p previously). Excluding the Identity business entirely, the group would be worth $363m or 111p per share (108p previously), still well ahead of the current share price. Key catalysts for the share price include evidence of growth in the Boku Identity business, new major merchants being signed up in either business or a growing contribution from the wallets service.
Exhibit 1: Financial summary
$m |
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
2020e |
2021e |
2022e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||||||
Revenue |
|
|
18.3 |
19.2 |
17.2 |
24.4 |
35.3 |
50.1 |
52.0 |
60.8 |
69.4 |
Cost of Sales |
(4.1) |
(4.0) |
(3.2) |
(2.3) |
(2.5) |
(5.6) |
(6.5) |
(9.0) |
(11.4) |
||
Gross Profit |
14.2 |
15.2 |
14.0 |
22.1 |
32.8 |
44.6 |
45.6 |
51.8 |
58.0 |
||
EBITDA |
|
|
(9.6) |
(11.4) |
(12.3) |
(2.3) |
6.3 |
10.7 |
10.5 |
14.3 |
17.0 |
Normalised operating profit |
|
|
(9.8) |
(12.4) |
(13.8) |
(4.0) |
4.8 |
4.5 |
7.8 |
11.6 |
14.5 |
Amortisation of acquired intangibles |
(0.8) |
(1.9) |
(1.7) |
(1.3) |
(1.3) |
(1.6) |
(1.6) |
(1.6) |
(0.8) |
||
Exceptionals |
(2.1) |
(0.1) |
(2.4) |
(2.2) |
(1.4) |
(0.3) |
0.0 |
0.0 |
0.0 |
||
Share-based payments |
(1.7) |
(1.8) |
(2.1) |
(1.5) |
(4.6) |
(6.8) |
(5.1) |
(5.1) |
(5.1) |
||
Reported operating profit |
(14.4) |
(16.2) |
(19.9) |
(9.0) |
(2.4) |
(4.1) |
1.1 |
5.0 |
8.7 |
||
Net Interest |
(0.6) |
(0.4) |
(1.2) |
(2.4) |
(0.6) |
(0.4) |
(0.7) |
(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 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
(17.1) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
(10.4) |
(12.8) |
(15.0) |
(6.4) |
4.3 |
4.1 |
7.1 |
11.0 |
13.9 |
Profit Before Tax (reported) |
|
|
(15.0) |
(16.6) |
(21.1) |
(28.5) |
(3.0) |
(1.3) |
0.4 |
4.3 |
8.1 |
Reported tax |
(0.4) |
(0.4) |
0.5 |
(0.1) |
(1.3) |
1.7 |
(0.0) |
(0.6) |
(1.2) |
||
Profit After Tax (norm) |
(7.8) |
(9.6) |
(11.2) |
(4.8) |
3.4 |
3.2 |
5.6 |
8.7 |
11.0 |
||
Profit After Tax (reported) |
(15.4) |
(17.0) |
(20.6) |
(28.7) |
(4.3) |
0.4 |
0.4 |
3.6 |
6.8 |
||
Minority interests |
0.0 |
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 |
0.0 |
||
Net income (normalised) |
(7.8) |
(9.6) |
(11.2) |
(4.8) |
3.4 |
3.2 |
5.6 |
8.7 |
11.0 |
||
Net income (reported) |
(15.4) |
(17.0) |
(20.6) |
(28.7) |
(4.3) |
0.4 |
0.4 |
3.6 |
6.8 |
||
Basic ave. number of shares outstanding (m) |
21.3 |
27.4 |
140.1 |
150.3 |
217.1 |
246.8 |
253.1 |
253.9 |
253.9 |
||
EPS - basic normalised ($) |
|
|
(0.36) |
(0.35) |
(0.08) |
(0.03) |
0.02 |
0.01 |
0.02 |
0.03 |
0.04 |
EPS - diluted normalised ($) |
|
|
(0.36) |
(0.35) |
(0.08) |
(0.03) |
0.02 |
0.01 |
0.02 |
0.03 |
0.04 |
EPS - basic reported ($) |
|
|
(0.72) |
(0.62) |
(0.15) |
(0.19) |
(0.02) |
0.00 |
0.00 |
0.01 |
0.03 |
Dividend ($) |
0.00 |
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 |
42.2 |
3.7 |
17.0 |
14.1 |
||
Gross Margin (%) |
77.6 |
79.1 |
81.4 |
90.7 |
92.9 |
88.9 |
87.6 |
85.2 |
83.5 |
||
EBITDA Margin (%) |
(52.5) |
(59.2) |
(71.4) |
(9.5) |
17.9 |
21.3 |
20.2 |
23.6 |
24.6 |
||
Normalised Operating Margin |
(53.2) |
(64.4) |
(80.0) |
(16.5) |
13.7 |
9.0 |
15.0 |
19.1 |
21.0 |
||
BALANCE SHEET |
|||||||||||
Fixed Assets |
|
|
32.7 |
30.8 |
26.8 |
26.9 |
23.0 |
52.2 |
50.0 |
47.7 |
45.9 |
Intangible Assets |
32.5 |
30.1 |
25.7 |
25.8 |
22.5 |
46.8 |
45.3 |
43.5 |
42.8 |
||
Tangible Assets |
0.2 |
0.7 |
0.5 |
0.4 |
0.3 |
3.5 |
2.2 |
1.3 |
0.4 |
||
Investments & other |
0.0 |
0.0 |
0.6 |
0.7 |
0.3 |
1.8 |
2.5 |
2.8 |
2.6 |
||
Current Assets |
|
|
72.5 |
53.0 |
48.9 |
79.3 |
84.0 |
89.2 |
92.1 |
118.5 |
145.7 |
Stocks |
0.0 |
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 |
53.6 |
54.9 |
68.1 |
78.2 |
||
Cash & cash equivalents |
12.0 |
9.0 |
11.3 |
18.7 |
31.1 |
34.7 |
36.3 |
49.5 |
66.6 |
||
Other |
0.7 |
0.6 |
0.5 |
1.4 |
1.3 |
0.9 |
0.9 |
0.9 |
0.9 |
||
Current Liabilities |
|
|
(69.6) |
(65.5) |
(61.0) |
(78.0) |
(79.6) |
(81.8) |
(78.8) |
(94.3) |
(107.6) |
Creditors |
(64.6) |
(60.4) |
(54.9) |
(75.5) |
(77.4) |
(78.0) |
(75.4) |
(92.1) |
(105.5) |
||
Tax and social security |
0.0 |
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) |
(2.1) |
(2.1) |
(2.1) |
(2.1) |
||
Other |
0.0 |
0.0 |
0.0 |
(0.0) |
0.0 |
(1.7) |
(1.3) |
(0.0) |
(0.0) |
||
Long Term Liabilities |
|
|
0.0 |
(0.3) |
(15.2) |
(0.2) |
(0.8) |
(2.6) |
(1.2) |
(1.2) |
(1.2) |
Long term borrowings |
0.0 |
(0.2) |
(15.1) |
(0.0) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other long-term liabilities |
0.0 |
(0.1) |
(0.1) |
(0.1) |
(0.8) |
(2.6) |
(1.2) |
(1.2) |
(1.2) |
||
Net Assets |
|
|
35.5 |
18.0 |
(0.4) |
28.0 |
26.6 |
57.0 |
62.1 |
70.7 |
82.7 |
Minority interests |
0.0 |
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 |
57.0 |
62.1 |
70.7 |
82.7 |
CASH FLOW |
|||||||||||
Op Cash Flow before WC and tax |
(9.6) |
(11.4) |
(12.3) |
(2.3) |
6.3 |
7.4 |
10.5 |
14.3 |
17.0 |
||
Working capital |
9.3 |
11.6 |
(3.4) |
1.0 |
7.2 |
3.0 |
(3.9) |
3.6 |
3.2 |
||
Exceptional & other |
(1.6) |
1.1 |
4.2 |
(5.5) |
0.2 |
(1.3) |
(0.4) |
0.0 |
0.0 |
||
Tax |
(0.0) |
(0.0) |
(0.0) |
0.0 |
(0.2) |
(0.1) |
(0.7) |
(1.0) |
(1.0) |
||
Net operating cash flow |
|
|
(1.9) |
1.3 |
(11.5) |
(6.8) |
13.5 |
9.0 |
5.6 |
16.9 |
19.3 |
Capex |
(1.1) |
(3.6) |
(1.5) |
(0.3) |
(0.3) |
(2.1) |
(1.5) |
(1.6) |
(1.6) |
||
Acquisitions/disposals |
5.9 |
0.3 |
0.0 |
0.0 |
(0.2) |
(0.7) |
0.0 |
0.0 |
0.0 |
||
Net interest |
(0.3) |
(0.3) |
(0.3) |
(0.9) |
(0.6) |
(0.4) |
(0.6) |
(0.6) |
(0.6) |
||
Equity financing |
0.2 |
0.1 |
0.1 |
19.8 |
0.5 |
0.6 |
0.0 |
0.0 |
0.0 |
||
Dividends |
0.0 |
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 |
(1.5) |
(1.9) |
(1.5) |
0.0 |
||
Net Cash Flow |
3.3 |
(2.2) |
(13.1) |
10.6 |
13.1 |
4.857 |
1.6 |
13.2 |
17.1 |
||
Opening net debt/(cash) |
|
|
(4.9) |
(7.0) |
(3.6) |
9.9 |
(16.2) |
(28.9) |
(32.6) |
(34.2) |
(47.5) |
FX |
(1.2) |
(0.8) |
(0.4) |
0.4 |
(0.5) |
(1.1) |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
0.0 |
(0.4) |
(0.0) |
15.1 |
(0.0) |
(0.0) |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(7.0) |
(3.6) |
9.9 |
(16.2) |
(28.9) |
(32.6) |
(34.2) |
(47.5) |
(64.5) |
Source: Boku, Edison Investment Research
|
|
Research: Healthcare
As we await the FDA verdict on ByFavo (remimazolam) for procedural sedation (PS) due 5 July 2020, Paion announced in June that it will provide remimazolam for compassionate use, supplied free, to sedate five intensive care COVID-19 patients in Milan. This has no immediate commercial implications but shows how remimazolam might be further developed. This may lead to published ICU case reports and we expect remimazolam to be an alternative to midazolam and propofol. Paion announced Q1 gross cash at €18m, down from €18.8m on 31 December, with a €15m milestone due on anticipated FDA approval. Paion has funds and loan facilities until 2022. Our indicative value remains at €270m.