JCurve Solutions Limited

JCS Details

JCurve Solutions Limited (ASX: JCS) provides enterprise resource planning (ERP) and telecommunications expense management solutions in Australia, New Zealand, and Southeast Asia.

Result Performance (FY21 Ended 30 June 2021):

• Revenue of the company for the full year period stood at $10.63 million, down by 5% from $11.21 million in FY20.
• The company has reported a strong profit of ~$152k in FY21 against a loss of ~$298k in FY20.
• It had generated operating cash flows of $1.85 million, where the cash balance stood at $5.1 million, an increase from the $4.2 million reported as on 30 June 2020.
• No dividends were declared during the period.

FY21 Financial Snapshot (Source: Company Reports)

Financials Updates for Q1FY22 (Period Ending 30 September 2021):

• Sales for Q1FY22 stood at $3.8 million, an increase of 61% on previous corresponding period and an increase of 53% on Q1 FY20 pre-pandemic levels. This increase in sales can be attributed to the combination of organic growth ($0.7 million) and from acquisitions completed offlate ($0.7 million).

Key Risks:

Technology Risk: The company is a technology-focused business and is prone to cybersecurity risk and managing customer data.

Stiff Competition: The company is exposed to intense competition in the market and is vulnerable to opportunity cost risk.

Outlook:

JCS continues to have strong cash reserves, no external debt and annual ERP recurring revenue streams exceeding $7 million, ensuring that the Company is in a strong position to take advantage of additional M&A opportunities as they arise. The company is undergoing brand rebuilding initiatives and it remains open for acquisition opportunities to spur growth.

Stock Recommendation:

The stock of JCS is trading above its average 52-weeks' levels of $0.023- $0.070. The stock of JCS gave a positive return of ~106.06% in the past nine months and positive returns of ~13.33% in the past three months. Considering the strong Q1FY22 performance, acquisition strategies, current trading levels, recent rally in share price, and the key risks associated with the business, we suggest investors to book profits at the current levels and give a 'Sell' rating on the stock at the closing price of $0.068, up by ~13.572% as on 2 November 2021.

JCS Daily Technical Chart, Data Source: REFINITIV

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.