A look at a few ASX growth stocks - EML, NAN, ALU, WTC and IRE

  • Jan 16, 2020 AEDT
  • Team Kalkine
A look at a few ASX growth stocks - EML, NAN, ALU, WTC and IRE

With the evolution of technology, business houses are adapting modernized tools in the workplace in order to lower human efforts and increase margin through operational efficiency. We will be discussing a few new-age technology businesses which provide innovative services to the retailers and corporates.

EML Payments Limited (ASX:EML)

EML Payments Limited operates as a payment solutions company to the retail sector. With a recent update on 14 January 2020, the company informed about its collaboration with NSW Health for 5 plus an additional 2 years. Within the contract, the company is expected to be the service provider of branded General-Purpose Reloadable card programs intended for the company’s employee salary packaging program.

Q1FY20 Financial Update for the Period ended 30 September 2019: EML reported its quarterly results wherein, the company reported revenue from Gift & Incentive at $13.6 million as compared to $9.3 million in the previous corresponding quarter. Gross Debit Volume (GDV), during the quarter, stood at $223 million as compared to $139 million in Q1FY19. Revenue from General Purpose Reloadable (GPR) came in at $6.4 million, marginally up from $6.2 million in Q1FY19. GDV from this segment stood at $715 million as compared to $709 million in Q1FY19.

Guidance: As per the FY20 guidance (excluding prepaid financial services), the company expects revenue at $116 million to $132 million while EBITDA is expected between $38 million to $42 million. NPATA is expected between $26.2 million to $29.4 million. Operating Cash flow is expected at 70% to 80% for FY20.

FY20 Guidance (Source: Company Reports)

Stock Update: The stock of EML closed at $5.240 with a market capitalization of $1.71 billion on 16 January 2020. The stock has generated stellar returns of 20.79% and 65.57% in the last three months and six months, respectively.

Nanosonics Limited (ASX: NAN)

Nanosonics Limited develops and markets technology products used for controlling infection and decontamination. Recently, the company reported the appointment of Dr Lisa McIntyre as a Non-executive Director from 13 December 2019.

FY19 Operational Highlight for the Period ended 30 June 2019: NAN declared its full-year results wherein the company reported sales at $84.3 million, up 39% on y-o-y basis aided by growth from the strong global installed base. The company reported capital sales at $32.8 million, up 29% from FY18 while the company reported sales from consumables and service at $51.5 million, up 47% on prior corresponding period basis.

FY19 Income Statement Highlights (Source: Company Reports)

Stock Update: The stock of NAN closed at $7.010 with a market capitalization of ~$2.16 billion on 16 January 2020. The stock has generated stellar returns of 40.98% and 136.51% in the last six months and one year respectively. The stock is available at a price to earnings multiples of 158.370x based on its trailing twelve months (TTM) EPS basis.

Altium Limited (ASX: ALU)

Altium Limited is associated with the development and marketing of computer software which is utilized for the design of electronic products.

FY19 Financial Highlights for the Period ended 30 June 2019: ALU announced its full-year results, wherein the company reported sales at US$177.2 million, up 23% on y-o-y basis. NPAT came in at US$52.9 million, up 41% from FY18. The business reported total subscribers at 43,698, depicting a growth of 13% on y-o-y basis. EBIT of ALU was reported at US$56.9 million, which grew 44% from FY18. The operating cash flow of the company came in at US$69.1 million, up 42% from the previous financial year. During the year, the company sold 8,015 designer Seats, showing a growth of 27% from FY18. All the business segments of ALU showed double-digit growth on a year-on-year basis. During the period, the company released a beta version of Altium’s new cloud platform Altium 365, with broad availability during November 2019 with the release of Altium Designer 20. The company reported cash and cash equivalents of US$80.531 million at the end of FY19 while total assets stood at US$277.926 million followed by net assets at US$184.558 million as on 30 June 2019.

Stock Update: The stock of ALU closed at $38.140 with a market capitalization of $4.79 billion on 16 January 2020. The stock has generated 10.48% and 56.26% returns in the last three months and one year, respectively. The stock has generated an annualized dividend yield of 0.93%. The stock is available at a price to earnings multiples of 63.230x on a TTM EPS basis.

Wisetech Global Limited (ASX: WTC)

Wisetech Global Limited is a service provider of software solutions for the logistics industries across the globe. Recently, the company reported the acquisition of a prominent customs, bonded storehouse named Ready Korea which provides trade compliance solutions across South Korea.

FY19 Key Operational Highlights for the Period ended 30 June 2019: WTC declared its full-year results, wherein the company reported revenue at $348.3 million, up 57% on y-o-y basis aided by strong recurring revenue at 88% of the total revenue. NAPAT during the period came in at $54.1 million as compared to $40.8 million in FY18. The company reported EBITDA at $108.1 million as compared to $78 million in the previous financial year. The company reported that the top 10 customers constitute 22% of the total revenue. The company reported the addition of new esteemed customer such as French logistics conglomerate, Bolloré Asia Shipping, China International Freight, Bon Voyage Logistics during FY19.

Stock Update: The stock of WTC closed at $25.320 with a market capitalization of $7.74 billion on 16 January 2020. The stock has generated negative returns of 28.2% and 18.91% in the last three months and six months, respectively. The stock has generated an annualized dividend yield of 0.14%. The stock is available at a price to earnings multiples of 137.460X on a TTM EPS basis.

Iress Limited (ASX:IRE)

Iress Limited provides IT solutions to financial market members and wealth administrators.

H1FY19 Operational Highlights for the Period ended 30 June 2019: IRE announced its first-half results, wherein the company reported revenue at $241.8 million, up 5% on H1FY18 and a net profit of $30.4 million, down 5% on y-o-y basis. The company reported the acquisition of international market data provider QuantHouse which is associated with IRE’s’ strategy to service the changing market data needs of customers globally.

Stock Update: The stock of IRE closed at $13.650 with a market capitalization of $2.39 billion on 16 January 2020. The stock has given stellar returns of 20.16% and 18.28% in the last three months and one year, respectively. The stock has generated an annualized dividend yield of 3.36%. The stock is available at a price to earnings multiples of 37.58x on a TTM EPS basis.


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