Imimobile just acquired South African company and is ambitious to grow strong. Perhaps it is time to buy, since the half year results are coming in December, director expressed confidence in the results, multiples are also attractive, progressive sector. All the indicators suggest it might be a good investment. Lets go for that!
Imimobile (IMO)
Purchase motives:
+ half year results are coming soon, in December.
+ September 2015 acquisition of company Archer Digital in South Africa will not be reflected in 
the financial results, but is a reason to give a promising presentation. Price paid for acquisition £5.6m seems to be good, knowing that company had £5.5m revenues (last four years revenues grew on average CAGR +26%) and £0.5m net profit. Ratios paid are P/S=1, P/E=11.2 – which is quite low for a rapidly growing company. However, there is a moment to watch, that Imimobile will have to pay 20% from assets (don’t understand how does that work practically) to management for motivation and 10% will be sold to minority owner. Despite potential lack of motivation of management, possibility of employees fleeting to other companies, Africa is crazy with mobile phones and over the next seven years mobile operators are planning to spend $100bn in expanding their coverage and capacity across sub-Saharan Africa and smartphone penetration is expected to grow from 72 million in 2013 to 525 million in 2020 according to the GSMA! Wow!
+ director expressed confidence and positive opinion about the upcoming results, many positive words.
+ EV/EBITDA of company is 6.1, which is quite healthy and not overpriced.
+ price of share now does not change already 2 months and the upcoming results could define the new direction.
+ one of the directors bought some shares for himself.
+ growth of revenues and profit 4 years in row.
+ very perspective sector: mobile technologies.
+ previous successful acquisition of Textlocal should still give some positive outcome .
+ spread within a normal range £1.51 / £1.47 = 2.7%
+ soon company will publish annual results, expecting good results based on trading update and good half year results
bought at £1.485 x 398 units = £591.03 + £7.5 trading commission at Bestinvest.com = £598.53
| Price, £ | Total, £ | Result, £ | Result, % | |
| Price bought | 1.49 | 598.53 | ||
| If sold now | 1.47 | 584.91 | -13.62 | -2.3% |
| Target price | 1.65 | 657.45 | 58.92 | 9.8% |
| Stop loss | 1.36 | 540.58 | -57.95 | -9.7% |
Forecasted results
| Imimobile (IMO) | Half year, Sep30 2014 | Half year, Sep30 2014 | Full year, Mar31 2014 | Full year, Mar31 2015 | Forecast Half year, Sep30 2015 |
| cap, mGBP | 58.1 | 58.1 | 58.1 | 70.3 | 70.3 |
| Sales | 20.5 | 21.5 | 43.4 | 48.9 | 24.1 |
| EBITDA | 3.4 | 3.8 | 7.3 | 9.2 | 4.3 |
| EBITDA margin | 16.6% | 17.7% | 16.8% | 18.8% | 17.8% |
| Net income | 1.9 | -3.5 | 3.92 | -3.4 | 2.2 |
| Equity | 13.9 | 24.9 | 13.9 | 24.4 | 24.9 |
| Net debt | -9.3 | -16.9 | -9.3 | -14.6 | -11.2 |
| CFO before WC | 4.9 | 1.7 | 7.2 | 9.2 | 4.3 |
| P/S | 1.4 | 1.4 | 1.3 | 1.4 | 1.5 |
| EV/EBITDA | 7.2 | 5.4 | 6.7 | 6.1 | 6.9 |
| P/E | 15.3 | -8.3 | 14.8 | -20.7 | 15.7 |
| P/BV | 4.2 | 2.3 | 4.2 | 2.9 | 2.8 |
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