GetSwift Limited (ASX: GSW)

GetSwift has updated the market that the group is focussed on two main client segments, one is National and multinational enterprise clients, and another is Internet based self-serve clients. Typically, contracts for Enterprise Clients are primarily two years in length, with initial periods of testing and integrations. These agreements are attractive to clients due to their specific levels of customisation and the unique aspect of GetSwift’s technology means that client usage normally is expected to increase once implemented. Almost 50% of the GetSwift’s Enterprise Client contracts have progressed through to early stages of the revenue generation phase. These primarily comprised of earlier Enterprise Client contracts. Depending on a client’s existing technology ecosystem, testing and analysis is required before achieving full integration of GetSwift’s technology. The Group will continue to assess on a case by case basis that whether any other contracts are moving to revenue generation phase (or their termination) that require disclosure to the market.

With this update, the stock of the group nose-dived by 55% on February 19, 2018 on returning to trade post a period of suspension. The group reported the above update indicating that less than half of its announced contracts have progressed to a revenue generating stage, which has been displeasing. Meanwhile, PwC is reviewing the group’s continuous disclosure policies.

We recommend avoiding this stock as of now.

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