Portfolio Updates

Fonix reports impressive maiden interim results


Fonix which provides SMS and carrier billing in the UK for the media, charity and gaming sectors, reported strong maiden interim results for the period to December, 2020 after listing on AIM in October, 2020. Revenues were up 25%, gross profit 22% and Adjusted EBITDA 28%, reflecting good cost control.

Kestrel Insight

Excitingly for the future, Fonix won 21 new customers during the first half from a base of 120 customers at the start of the financial year. This is yet to deliver significant revenues but is expected to stimulate future growth.

In addition, Fonix is close to launching international services, supporting several existing gaming customers in their overseas expansion: mobile can play a useful role helping gaming customers ensure compliance with local regulation and controlling spend levels.

Fonix operates in a regulated sector and boasts over 30% market share. It benefits from negligible customer losses and consistent growth from existing accounts, which delivered 35% compound revenue growth prior to IPO. CEO Rob Weisz impresses us with his comprehensive knowledge of product, customers and the market, and tight control of the business.

Fonix intends to pay out 75% of profit after tax in dividends, generating a forecast yield of 3.5%, making Fonix one of the highest yielding companies in the AIM technology sector. Not a bad start to life as a quoted company, which has seen a 60% share price rise since IPO.

Kestrel invested in Fonix at its IPO in October 2020, becoming its second-largest external shareholder.

 

Kestrel’s Portfolio Updates should neither be construed as investment research, nor the provision of investment advice, nor a recommendation. This article should be viewed as short term commentary only based on the latest economic statistics, company results or information on upcoming releases or events. It is only a brief unsubstantiated summary of Kestrel’s opinion on such information as at the date of publication and no reliance may be placed upon any contents of this article by the recipient.


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