Stocks’ Details

OneVue Holdings Limited

Major Revenue Generation from Fund Services: OneVue Holdings Limited (ASX: OVH) is engaged in the provision of managed fund administration, superannuation member administration, full function platform administration, and superannuation trustee services. In a recent announcement to the exchange, the company updated on the completion of the sale of its Trustee Services business to Sargon Capital Pty Ltd for an initial purchase price of $12 million in cash and a deferred purchase price of $31 million, payable by 30 November 2019. The net cash proceeds from the sale will be utilised to pay $8.2 million in relation to acquisition of KPMG Super Services Business, with $1 million left to be paid in January 2020. Following the sale of OneVue’s Trustee Services business to Sargon Capital Pty Ltd, Andrew Macpherson has resigned as Non-Executive Director, effective from 28 June 2019.

Highlights of March 2019 Quarter: During the period, the company saw the fund numbers under managed fund administration increase to 1,348, reflecting a growth of 41% on the previous quarter and 78% on pcp. Gross quarterly flows from Platform Services business amounted to $289 million with net inflows of $134 million, up 32% on the previous quarter and 19% on pcp.

In the first half of the financial year 2019, the company witnessed 31% growth in revenue and 8% growth in underlying EBITDA, despite high investment during the period. Fund Services and Platform Services businesses accounted for 61% and 39% of the revenue, respectively.


Key Financial Highlights (Source: Company Reports)

Stock Recommendation: The stock of the company generated returns of -11.70% and -5.68% over a period of 1 month and 3 months, respectively. The market capitalisation of the company stood at ~$109.83 million as of July 03, 2019. The half year ended 31 December 2018 was characterised by strong revenue growth with a high net cash position. In addition, the company continued to deliver growth through the March quarter, as reflected by the rising fund numbers in Fund Services business as well as cash flows from the Platform Services business. Through the sale of Trustee Services business to Sargon, the company now intends to focus on growing the Fund Services and Platform Services businesses. Given the above-stated factors and looking at the current trading level, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.415, with no change on the previously traded price.

Change Financial Limited

Refocusing on Enterprise Banking and Payments Processor Businesses: Change Financial Limited (ASX: CCA) is engaged in providing mobile banking services through ChimpChange mobile application. The company recently updated the exchange regarding divestment of its interest in the Ivy Project. The company agreed to transfer 117,000,000 Ivy tokens back to Ivy Koin LLC, carried at cost at a value of $1. The cash proceeds will be available to support on-going working capital requirement to fund the completion of the company’ enterprise banking solution and payments processor business.

In the trading update for March quarter, the company reported cash at the end of the period amounting to US$0.9 million. In January, the company entered into an agreement with its US banking partner, Central Bank of Kansas City for reduction of the fees payable to CBKC. The reduction was aimed at eliminating ongoing losses from operating the ChimpChange business.

Highlights of 1HY19: During the period, the company reported revenue from ordinary activities amounting to US$0.51 million, up 18% on pcp revenue of US$0.43 million.Loss for the period amounted to US$4.28 million, depicting an improvement of 20% in pcp loss of US$5.31 million.


Half-Yearly Results (Source: Company Reports)

Stock Recommendation: The stock of the company generated returns of -10.91% and 22.50% over a period of 1 month and 3 months, respectively. Presently, it is trading close to its 52-week low level of $0.028. During the half year ended 31 December 2018, the company witnessed growth in revenue along with an improvement in the losses incurred over the period as compared to pcp. In addition, through the recent capital raising initiatives, monetisation of Ivy and the restructures agreement with CKBC, the company is refocusing on completing its enterprise banking solution and payments processor business. This offers a substantial opportunity to grow due to the size of the addressable market and the limited number of competitors in the business. Considering the above factors in combination with the current trading level, we recommend a “Hold” rating on the stock at a current market price of $0.050, up 2.041% on 03 July 2019.
 

Bionomics Limited

Extended the Term of Executive Chairman Appointment to 20 November 2019: Bionomics Limited (ASX: BNO) is engaged in the development of novel drug candidates for the treatment of central nervous system disorders and cancer. The company recently updated the exchange on the extension of Errol De Souza’s role as the Executive Chairman till 20 November 2019, at a remuneration of $18,000 per month.

In another recent update, the company released the BNC210 clinical trial results for the treatment of agitation along with its development for the treatment of post-traumatic stress disorder. The study confirmed the safety of BNC210 for the elderly population. During the trial, there were no differences noticed in the treatment of agitation through BNC210 against the placebo treatment. The company will now pursue a study to assess its capability for treatment of PTSD, which has an estimated cost of $300,000.

Key Highlights of 1H19: During the first half of the financial year 2019, the company reported total revenue amounting to $5.29 million (including other income) against the revenue of $7.17 million in the prior corresponding period. During the period, the company incurred operating loss after tax of $11.18 million, $2.34 million more than the loss in the prior corresponding period.

Cash at the end of the period amounted to $27.35 million, as compared to $24.93 Mn as at 30 June 2018. The cash position during the period strengthened due to receipt of licensing revenue of $0.65 million, R&D tax incentive refund of $6.56 million, and a private placement to BVF Partners L.P. amounting to $9.8 million.


Income Statement for 1H19 (Source: Company Reports)

Outlook: Bionomics is currently pursuing numerous drug discovery programs in core areas of cognition and pain. The company plans to assess its strategic options for partnering and portfolio prioritisation while conserving cash.

Stock Recommendation: The stock of the company generated negative returns of -57% and -73.94% over a period of 1 month and 3 months, respectively. The half-year ended 31 December 2018 was characterised by a strong cash position attributable to receipts in the form of R&D incentive refund, licensing revenue, and private placement of shares. The company also witnessed continued success in its 6-year long partnership with Merch & Co. Alongside, the company is working well towards the development of its BNC210 and assess its therapeutic potential, through clinical trials. Hence, considering the progress of its ongoing trials for BNC210, strong cash position in 1HFY19 and current trading level, we recommend a “Hold” rating on the stock at the current market price of $0.039, down 9.302% on 03 July 2019.
 

Alderan Resources Limited

Losses Increased in the Last Four Years: Alderan Resources Limited (ASX: AL8) is primarily engaged in mineral exploration in Utah, USA. The company recently updated that 44,346,524 fully paid ordinary shares were released from escrow on 9 June 2019. In another announcement, it was updated that the company received firm commitments to raise $1.6 million through a private equity placement at 3.2 cents per share, proceeds, from which, will be utilised for further exploration in the Frisco area.

Highlights of 1HY19: In the interim financial report for FY19, the company reported a loss for the period amounting to $3.19 million as compared to the loss of $2.97 million in the prior corresponding period. As at 31 December 2018, the group had cash and cash equivalent of $873,218. The period was marked by commencement of drilling activities at Accrington and drilling of two holes at the Peacock & Washington prospects.


1HY19 Income Statement (Source: Company Reports)

Stock Recommendation: The stock of the company reported negative returns of 95.32% over a period of 1-year and has a market capitalisation of $7.13 million. The company reported a continuous increase in losses from the year 2015 through 2018. Loss after income tax reported in 2018 was $6.71 million as compared to a loss of $0.09 million in 2015. By looking at the business performance in the last few years along with the negative returns on stock, the stock can be avoided at the current market price of $0.044 per share.

 
Comparative Price Chart (Source: Thomson Reuters)   

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