2 Small-cap Stocks – APT and MNY

Afterpay Touch Group Limited

APT Details

Healthy Performance: Afterpay Touch Group Limited’s (ASX: APT) stock was down by 5.45% in last five days post a 64.5% rise in last six months. The recent fall was partly owing to profit booking and concerns over the long-term prospects of the group. However, there has been a slight recovery on March 28, 2018. In the 1HFY18, APT posted total revenue of $49.9 Mn, marking a splendid growth of 732% on Year on Year (YoY) basis. EBTDA (excluding significant items) stood at $12.1 Mn in 1HFY18, up 1917% YoY. However, loss after tax came at $743,000 in 1HFY18 due to high finance cost, one-time cost related to merger activity and international expansion expenses, and higher taxation. On the other hand, the balance sheet remains strong with current assets of $250.2 Mn compared to current liabilities of $41.9 Mn as on 31 December 2017. Moreover, cash used in operating activity increased by $50.1 Mn during the period reflecting the solid growth of the Group’s business. Given the deferred nature of the customer payments for each outgoing settlement and strong month on month growth in sales, the net cash flows used for operating activities continue to be supported by financing cash flow. With the completion of merger between Afterpay and Touchcorp, there is a significant scope to expand footprint in current market and international market. The group will continue its partnership with major brands like Anaconda, Spotlight, etc. across business verticals. We believe that the stock has some more room for growth, and we give a “Hold” recommendation on the stock at the current price of $6.77
 

Revenue Mix Performance (Source: Company Reports)
 

Money3 Corporation Limited

MNY Details

Consistent Performance: Money3 Corporation Limited (ASX: MNY) is a finance company that provides secured and unsecured personal loans in Australia. MNY stock price was down by 0.783% on March 28, 2018 while the company had lately posted strong half year result. Revenue was up 16.8% to $60.4 Mn in 1HFY18 from $51.7 Mn in 1HFY17 on the back of product mix growth. During 1HFY18, EBITDA increased by 18% to $27.5 Mn against $23.3 Mn in 1HFY17 due to focus on cost reduction strategy. EBITDA Margin grew by 46 bps to 45.5% in 1HFY18 from 45.1% in 1HFY17. NPAT during 1HFY18 came at $15.5 Mn against $13.8 Mn in 1HFY17, marking growth of 12.3% on YoY basis. Based on the solid half year performance, the company has upgraded its full year profit guidance to $31 Mn.

The Board of Directors declared an increased interim dividend of 4.5 cents per share which is up by 80% on a year on year basis. It will be paid on May 21, 2018. The company has experienced strong demand of secured auto loans business that was the key driver of its solid performance during the first half of the year. In view of this, the company continues to increase its market share of the secured automotive loans which will see further growth in MNY’s secured receivables and hence growing revenues and profitability in years to come. The group’s Chief Financial Officer, Brett Coventry has tendered his resignation while Siva Subramani has been appointed as acting CFO. Meanwhile, the stock prices were up by 35.34 per cent in the past six months and were slightly down by 0.52 per cent in the past one week. We recommend to “Hold” the stock at the current market price of $1.90
 

Financial Performance (Source: Company Reports)

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