Leading International Investment Research, Edison Investment Research

Edison Investment Research

Leading International Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Equity Bottom-Up

Esker S.A. designs and produces software applications for business management processes. The Company offers dematerialization solutions, fax server products, and host access products. Esker's products enables the automation and flow of documents into, within and out of the organization.

Esker reported Q224 year-on-year constant currency (cc) revenue growth of 14% and bookings annual recurring revenue (ARR) cc growth of 65%. Bookings more than doubled in the Americas, helped by a large upsell to an existing customer, and had double-digit growth in every other region. On the back of the strong order intake year-to-date, management confirmed that its expectations for FY24 were unchanged. We have made small upgrades to our forecasts to reflect the strong Q2 performance.

Esker reported Q224 year-on-year constant currency (cc) revenue growth of 14% and bookings annual recurring revenue (ARR) cc growth of 65%. Bookings more than doubled in the Americas, helped by a large upsell to an existing customer, and had double-digit growth in every other region. On the back of the strong order intake year-to-date, management confirmed that its expectations for FY24 were unchanged. We have made small upgrades to our forecasts to reflect the strong Q2 performance. 

Esker - Record Q2 bookings; FY24 outlook maintained

Boku, Inc. provides online mobile payment services. The Company offers a payment platform that integrates into mobile network operator protocol and enables people to pay for the goods using their mobile phone. Boku serves customers worldwide.

In H124, digital wallets/account-to-account (A2A) adoption continued, with revenue growth of more than 50% y-o-y. Carrier billing revenues were robust with double-digit growth. The adjusted EBITDA margin is expected to be broadly flat versus FY23 as Boku invests to support core back-end infrastructure. We have raised our revenue forecasts while trimming our EBITDA forecasts to reflect this investment, which should support stronger growth in the medium term. The company has appointed a new CFO, Rob Whittick, with immediate effect.

In H124, digital wallets/account-to-account (A2A) adoption continued, with revenue growth of more than 50% y-o-y. Carrier billing revenues were robust with double-digit growth. The adjusted EBITDA margin is expected to be broadly flat versus FY23 as Boku invests to support core back-end infrastructure. We have raised our revenue forecasts while trimming our EBITDA forecasts to reflect this investment, which should support stronger growth in the medium term. The company has appointed a new CFO, Rob Whittick, with immediate effect.

Boku - Strong underlying revenue growth in H124

Record PLC is a specialist currency management firm. The Company provides specialist currency management to institutions and corporations, pension plans, and other institutional investors. ... More

Record reported FY24 PBT of £12.9m, down 12% y-o-y and in line with our estimate of £12.8m. Underlying PBT was £14.8m, up 2% y-o-y on record assets under management (AUM), which grew 16.5% to $102.2bn. The final ordinary dividend surprised positively at 2.45p, above our 2.36p forecast, and a special dividend of 0.6p was declared. As new CEO Dr Jan Witte continues to refocus the strategy over the next six months, the company is guiding to relatively flat management fees. We have cut our FY25 PBT estimate to £12.1m (previously £14.8m) on a weaker fee revenue projection. We also initiate FY26 PBT and diluted EPS estimates at £14.0m and 5.43p, respectively. The cash-generative business model enables the group to continue to pay an attractive ordinary dividend.

Record reported FY24 PBT of £12.9m, down 12% y-o-y and in line with our estimate of £12.8m. Underlying PBT was £14.8m, up 2% y-o-y on record assets under management (AUM), which grew 16.5% to $102.2bn. The final ordinary dividend surprised positively at 2.45p, above our 2.36p forecast, and a special dividend of 0.6p was declared. As new CEO Dr Jan Witte continues to refocus the strategy over the next six months, the company is guiding to relatively flat management fees. We have cut our FY25 PBT estimate to £12.1m (previously £14.8m) on a weaker fee revenue projection. We also initiate FY26 PBT and diluted EPS estimates at £14.0m and 5.43p, respectively. The cash-generative business model enables the group to continue to pay an attractive ordinary dividend.

Custodian REIT plc is a real estate investment trust. The Company invests in commercial properties, including industrial, retail and office properties throughout the United Kingdom.

Custodian Property Income REIT’s (CREI’s) confidence in its organic growth outlook is reflected in accelerated, fully covered DPS growth. Reversionary income potential is strong and, with the occupier market remaining robust, average rental values have continued to increase, providing ongoing support for the company’s enhanced income strategy. The prospective dividend yield is 7.8% and the expected decline in interest rates should benefit earnings and support property valuations and NAV.

Custodian Property Income REIT’s (CREI’s) confidence in its organic growth outlook is reflected in accelerated, fully covered DPS growth. Reversionary income potential is strong and, with the occupier market remaining robust, average rental values have continued to increase, providing ongoing support for the company’s enhanced income strategy. The prospective dividend yield is 7.8% and the expected decline in interest rates should benefit earnings and support property valuations and NAV. 

Custodian Property Income REIT - Organic growth paying dividends

Recce Limited produces pharmaceutical products. The Company offers antibiotics to kill bacteria. Recce markets its products in Australia.

We highlight the opportunity of topical RECCE® 327 (R327) to address diabetic foot infections (DFIs), which is the leading cause of limb morbidity in diabetic patients and an area of unmet need as currently available topical drugs have limited effectiveness. Recce is planning to initiate a Phase III registration-enabling study in H2 CY24 in Indonesia. We anticipate that positive results from the trial could lead to Recce’s earliest R327 commercialisation opportunity, through a launch in South-East Asia in the DFI indication in H2 CY26. The company announced an A$10m equity financing that is expected to extend its runway into FY26. We now obtain an rNPV valuation of A$688.5m (or A$3.07 per share), versus A$661.3m (or A$3.27 per share) previously. The reduced value per share is due to the anticipated increase in share count post-financing.

We highlight the opportunity of topical RECCE® 327 (R327) to address diabetic foot infections (DFIs), which is the leading cause of limb morbidity in diabetic patients and an area of unmet need as currently available topical drugs have limited effectiveness. Recce is planning to initiate a Phase III registration-enabling study in H2 CY24 in Indonesia. We anticipate that positive results from the trial could lead to Recce’s earliest R327 commercialisation opportunity, through a launch in South-East Asia in the DFI indication in H2 CY26. The company announced an A$10m equity financing that is expected to extend its runway into FY26. We now obtain an rNPV valuation of A$688.5m (or A$3.07 per share), versus A$661.3m (or A$3.27 per share) previously. The reduced value per share is due to the anticipated increase in share count post-financing.

Recce Pharmaceuticals - Taking a closer look at diabetic foot infections