Boku expects FY20 to be ahead of expectations
has reported strong growth from its payments division and said it expects FY20 results to be ahead of the current market consensus expectations for both revenues and EBITDA.
In a trading update for the year ended 31 December 2020 the independent carrier commerce company said it saw continued strong payments revenue growth in H2 2020, particularly in Q4, which translated ‘into higher levels of EBITDA due to powerful operational gearing.’
FY20 revenue is expected to be at least $56.3m (FY19 $46.8m) - an increase of at least 20% on 2019 underlying revenues - while adjusted EBITDA is expected to be at least $15m (FY19: $7.4m), an increase of over 100% on 2019 and $1.5 ahead of market expectations.
Boku held around $62.7m in cash on 31 December 2020 (FY19: $35.6m). To part-fund the acquisition of Fortumo Holdings, a new $20.0m debt facility was taken out in June 2020 and as at 31 December 2020, the Company had reduced this facility by $7.6m to $12.4m.
Specifically, Boku’s payments division saw “another very positive year” following the acquisition of direct carrier billing company Fortumo for $41.0m, completed on 1 July 2020
Revenue is expected to be at least $51.1m, a 25% rise on FY19's figure of $40.1m.
Boku had 28.8m Monthly Active Users ("MAU") across the Boku and Fortumo payments businesses in December 2020, an increase of 8.4m from June 2020 and 11m higher (+61%) than December 2019 (17.8 million). 4.6 million of these users were processed by Fortumo.
Shares in Boku have increased by over 40% in value in the past three months to open 0.96% higher this morning at 158.5p following the announcement.
Payments adjusted EBITDA is expected to be at least $18.8m, up 47% (2019: $12.8m) which includes Fortumo EBITDA of at least $1.5m. As previously highlighted, COVID-19 related cost savings have had a material one-off impact that has positively impacted Payments EBITDA.
"Whilst the Boku Payments Division - accounting for more than 90% of revenues - prospered in the pandemic, Boku Identity trod water. Revenues will be at least $5.2m, but losses too have reduced to c.$3.8m,” commented Jon Prideaux, Boku's Chief Executive Officer.
Boku’s Identify division revenues remain in line with expectations with revenues of at least $5.2m (2019: $6.7m) after it was impacted by COVID-19 and local US supply headwinds.
‘Good progress’ continues on building out international carrier supply, however, which is live with more than 200 carriers in 60 countries, the company outlined to investors.
"The pandemic has affected all aspects of business and personal lives. Many companies have been hanging on for their lives, others have perished in the struggle. Boku, positioned as it is, at the intersection of mobile and digital entertainment, is one of the fortunate companies that has been able to prosper,” commented Prideaux.
He added, "Looking forward, we have made real progress on launching wallets as a new payment method, initially to our existing merchants.
We're now live with 11 wallets: volume growth has been material, albeit off a small base. Pleasingly we've also launched with global merchants against much larger competition and have a healthy pipeline of new deployments.
It is clear that wallets will be a material contributor to revenues and profits in future years. In 2021 we will be investing in the platform to ensure that we can maximise these opportunities.”
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