VOR Details

FY21 Results Performance (For the Period Ended 31 March 2021): Vortiv Limited (ASX: VOR) is a technology-based company and is engaged in investing and collaborating with promising businesses which hold commercialised solutions in the digital, cybersecurity, analytics, and cloud services space to develop value in the target opportunities together

• The company has recorded significant growth in revenue in FY21 to $99K compared to the revenue of $4K achieved in FY20.
• The company has witnessed a substantial rise in profit after tax to $10.41 million in FY21 from $2.28 million in the prior year.
• The working capital increased by $14.4 million to $14.8 million on 31 March 2021 compared to 31 March 2020 owing to the sale of DWX and C10.
• The Board of Directors declared a fully franked dividend of 5.55 cents per share and it was paid on April 9, 2021.

 Income Highlight (Source: Analysis by Kalkine Group)

TSI India Management’s Performance

• Revenue Rose 4% in FY21: VOR holds 24.89% investment interest in Transaction Solutions International (India) Private Limited (TSI India). TSI India Management has achieved revenue and underlying profit of AUD$13.5 million and AUD$3.8 million, respectively in the quarter ended 31 March 2021. For FY21, it has recorded 4% YoY growth in revenue to AUD$48.7 million.
• Sharp Uptick in Profitability: The company witnessed a significant rise in profit before tax by 145% to AUD$6.3 million in FY21 driven by an increase in commission rebate along with the benefits of lower maintenance costs and an increase in ATMs.

Key Risks

Due to the uncertainty on the timing and value of cash flow activities, the company has not undertaken any further strategies or hedges to offset the financial risks. The company is also exposed to credit risk as well as liquidity risk, interest rate risks, among others. Changes in market interest rates would adversely impact its cash and cash equivalents.

Outlook

The company is mulling on further acquisition and investment opportunities and is focused on progressing a transaction right away. The management has estimated sufficient cash flows to meet all commitments and working capital requirements until FY22.

Stock Recommendation: VOR has delivered 6-months and 9-months returns of ~+28.29% and ~+39.61%, respectively. The stock has a 52-week high and low price of $0.225 and $0.035, respectively.

Meanwhile, the company’s current ratio at 2.84x in FY21 remained lower than the industry median of 3.55x. Further, its return ratios remained negative with ROE at -2.4% in FY21 compared to the industry median at 1.7% and ROIC stood at -2.4% in FY21.

Considering the aforementioned factors, the current trading levels, technical levels mentioned below, and the associated business risks, we recommend a ‘Sell’ rating on the stock at the current market price of $0.051 as on 9 September 2021, 3:50 PM (GMT+10), Sydney, Australia.

Technical Overview:

VOR's prices gained ~45.71% from the recent low and broke an important resistance level of AUD 0.050 on an upside. Now the prices are facing stiff resistance of AUD 0.053 level, indicating the possibility of a downside correction in the stock. On the daily chart, the leading indicator RSI (14-period) is trading in an overbought zone at ~77.43 levels, further supporting a bearish stance. However, the CMP is above 21-period SMA, acts as a support level for the stock. An immediate support level for the stock appears at AUD 0.042 level.

VOR Daily Technical Chart, Data Source: REFINITIV

Note: The purple color line in the chart depicts RSI (14-period), while green color histograms at the bottom of charts represent volumes. The red color lines show 21-Period SMA.

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.