Impelus Limited
On-Going Developments: Impelus Limited (ASX: IMS) (formerly, Mobile Embrace Limited - MBE) is a small cap company with the market capitalization of $10.82 Mn as of July 17, 2018. Recently, the group provided a market update to the shareholders in which the group indicated to continue to scale up its DPM operations with the focus on premium lead generation and Customer Acquisition technology. During the quarter, the group has extended its services into the Health sector with the objective of strengthening its core Digital Performance Marketing (DPM) operations. After this, Lead Generation/Customer Acquisition technology is now active in Education, Finance, Investment and Health care sectors. As of now, the group focuses on developing the growth platform of its DPM business with the take-off of more digital Lead Generation/Customer Acquisition devices that convey better-qualified customer leads to the clients cost-effectively. Furthermore, it focuses on to scale down its non-core activities including Clipp and Direct Carrier Billing (DCB) so that the group will deliver positive cash generation in the run-off phase. Based on its strategic move, the group has decreased its bank debt from $7.97 Mn to $6.9 Mn through regular payments from operational cash flow during the six months to 30 June 2018. We expect that the group may strive towards improving its balance sheet at the back of focus on debt reduction plan; however, challenges owing to DCB cannot be ignored completely that have already impacted the group at a significant level.
Besides this, the group has identified several organic growth opportunities in its UK operations and is developing new digital assets specifically for that market. With this, the company can gain market share in the UK market in the immediate future. More digital assets will be launched this quarter.
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Financial Performance – DPM only (Source: Company Reports)
On the other hand, the company had recently announced the resignation of Mr Drew Kelton as a Non-Executive Director. Meanwhile, the share price has fallen 56.52 per cent in the past six months and the stock is trading close to 52-week low level. Hence, we maintain our “Hold” recommendation on the stock at the current market price of $ 0.019 (down 5% on July 17, 2018), considering aforesaid developments while volatility prevails, and we wait for financial result which is expected to be out in the August month this year.
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