Yowie Group Ltd

Encouraging Operational Update and New 4 Series Launch: The share price of Yowie Group Ltd (ASX: YOW) surged up 22.857 per cent on June 04, 2018 after the announcement of operational update and new 4 series launch in the United States. According to the release, Yowie is steadily growing the percentage of stores across North America that carry the Yowie brand to 42.1% in April 2018 (versus 36.9% in April 2017). Along with this, the convenience (17.1% from 9.1% a year ago) and Grocery (18.2% from 14.3% a year ago) channels have made the biggest gains during 2018. Further, the group foresees this distribution to steadily grow with the additions of CVS, 7-11 and other significant regional grocery and convenience chains. On the other hand, the group has implemented an aggressive cost-cutting process that is expected to yield over US$3 Mn in annual savings compared to FY18. These savings have been achieved through reducing headcount, re-focusing and reducing marketing expenditure, restructuring the Company’s sales and distribution network and the closing of the Company’s Hong Kong office. Recently, the group has launched US Series 4 with the help of the Wildlife Conservation Society and YowieScope Collector’s App at the National Confectioner’s Association Sweets and Snacks Show in Chicago. Going forward, this new series will support topline growth in relation to gain new customer attraction.


Product Mix (Source: Company Reports)

The group has appointed Mr. William Johnson to the Board as a Non-Executive Director, effective from April 10, 2018. While the share price was down by 81.82 per cent in the past one year and further down by 25.53 per cent in the last one month as at June 01, 2018, we put a “Hold” recommendation on the stock at the current market price of $ 0.086, considering new product launch, expanding footprint along with the solid growth of stores across North America.
 

iSignthis Ltd

Interim Update along with launch of customised B2B services: iSignthis Ltd.’s (ASX: ISX) stock plunged 10.811 per cent on June 04, 2018 despite the decent interim update wherein the ISXPay contracted book value has continued to grow, and the contracted value is now more than AUD$550m GPTV per annum. The GPTV processed by the Company did not experience the growth expected by the ISX, due to several unforeseeable technical issues. These technical issues included litigation between two of the merchants and ASIC, which had resulted in processing for those two merchants witnessing a decline. Further, the group has resolved the upstream technical issue which was reported earlier.In order to do this, the resolution of the technical issues, which previously prevented the company from processing the volumes of some of its contracted merchants at maximum capacity, will shortly allow the group to crystallize the full potential gross profit from each contracted merchant. We expect that the top-line will continue to grow but it could be at a slightly slower pace and a lower gross profit margin than it was expected by management during the period.


Growing Operating Revenue (Source: Company Reports)

On the other hand, the group has launched a customized business to business (B2B) Euro based transactional banking service, aimed to give support to its AML regulated merchant base and affiliate networks. The service has been designed to fill a niche requirement for Clients in the AML regulated sector businesses, in particular, the small to mid-scale CFD, FX, and Gaming industry, where retail banking facilities do not provide reasonable operating solutions. Meanwhile, the stock climbed up by 12.12 per cent in the past six months and further rose up by 5.71 per cent in past one week as at June 01, 2018. It might be interesting to wait and watch of its preliminary guidance on revenues and likely outcomes of performance share issue which will be disclosed on June 30, 2018, and hence we give a “Hold” recommendation on the stock at the current market price of $0.165, considering continued focus on delivering multiple services to its existing services customers, integrating new customers and securing additional business development opportunities across an expanding range of core KYC, merchant and banking services despite few headwinds related to technical concerns.

 
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