World Message Version 2.0 could be the next growth driver: Norwood Systems Limited (ASX: NOR) witnessed a stock price uplift of 7.69% on March 06, 2018 as the group launched world message version 2.0 (high-performance SMS and instant messaging app) on the Apple app store. This World Message 2.0 version server supports industry state-of-the-art reliability, extensibility and scalability and it is an ideal platform for critical mission environments such as financial services, government and sensitive corporate applications. We expect that this launch will support topline growth of the company in years to come.

Revenue during 1HFY18 was recorded at $149,317 against $119,472 in 1HFY17, marking a growth of 25.0% YoY on the back of rapid expansion of Norwood’s Enterprise sales channel partners. The group has also signed an agreement with a big US client (Oracle) during the period. Primarily, Oracle’s confab and Norwood’s Corona APIs will be integrated into Oracle’s open banking API ecosystem to enable Oracle’s financial services clients to integrate Norwood’s Corona services into their IT systems. Primarily, Corona delivers Over the Top (OTT) connectivity, knowledge and intelligence services and has found to be a path-breaking platform by many partners.

The net loss for the first half of the period amounted to $1,600,785 from $2,938,878 in 1HFY17, representing an improvement of about 46% over the previous corresponding period. This is attributed to the improvement in the revenue and cost-cutting exercise during the same period.

Meanwhile, NOR stock has fallen 18.75% in six months and slipped further down by 7.14% in last five days, as on March 05, 2018. However, given the latest development as a potential catalyst, we give a “Speculative Buy” recommendation on the stock at the current price of $0.014


Segment-wise Revenue Contribution (%) for 1HFY18 (Source: Company Reports)

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