Is Focus On Cloud Applications Helping These Tech Companies - XRO, APX And VGL?

  • Mar 22, 2019 AEDT
  • Team Kalkine
Is Focus On Cloud Applications Helping These Tech Companies - XRO, APX And VGL?

The global market for cloud computing platforms and applications is maturing with a proven scale, security and speed to support and catalyse new business models. According to a forecast by Gartner, the worldwide public cloud services market is estimated to grow by approximately 17.33% to ~ $ 206.2 billion in 2019, up from ~$ 175.8 billion in 2018. The following tech companies are well leveraging the emerging opportunities as the digital business ecosystems are evolving.

Xero Limited

Xero Limited (ASX: XRO) is a global software services company based in Wellington, New Zealand. It offers a cloud-based accounting software, Xero, that connects small businesses and their advisors in various sectors including construction, hospitality, non-profit, legal and others.

On March 22nd, 2019, the XRO stock price closed the market trading at AUD 49.750, up 0.811%, indicating an intra-day gain of AUD 0.400 and close to the 52-week high of AUD 52.570. Moreover, XRO has generated a positive YTD return of 17.64% to date.

As per the half-year financial results to September 30th, 2018, Xero posted the annualised monthly recurring revenue at $ 589 million with the total global subscribers rising to 1.6 million, up 380k year-on-year reflecting strong growth. Besides, the operating revenue improved by 37% year-on-year to $ 256.5 million with an EBITDA (excluding impairment) of $ 34.5 million, up $ 17 million year-on-year. At the end of the period, the cash and short-term deposit balance amounted to $ 76.2 million.

Appen Limited

The Chatswood, Australia-based Appen Limited (ASX: APX), develops high-quality, human annotated datasets for machine learning and artificial intelligence applications for clients in the United States, Australia, and other countries worldwide. The company has a valuation above AUD 2 billion, and the APX stock price closed the market trading at AUD 23.430, up 0.257% on March 22nd, 2019. The stock remained consistently strong over the past year with the return yields of 97.05% for the last three months and 71.08 % for the previous six months.

On March 20th, Appen announced a new share purchase plan for eligible shareholders to subscribe for up to $ 15k of new fully paid ordinary shares and raise up to $ 15 million. The offer deadline is Thursday, April 4th, 2019 until 5.00 pm (Sydney time). This follows another successful placement of AUD 285 million on March 12th, 2019.

The company reported strong financial results for the half-year ended December 31st, 2018, with its revenue rising 119% to $ 364.3 million and the underlying EBITDA of $ 71.3 million also increased by 153% on the prior corresponding period (PCP). While the underlying EBITDA margins improved from 16.9% to 19.6%, the underlying NPAT also grew by 148% to $ 49.0 million.

Vista Group International Limited

The Auckland, New Zealand-based Vista Group International Limited (ASX: VGL) develops and commercialises software solutions to the clients across the global film industry. To date, the company has a valuation of over AUD 760 million. On March 22nd, 2019, the VGL stock priced closed the market trading at AUD 4.580, down 0.651% but close to the 52-week-high of AUD 4.840 recorded on March 18th, 2019. VGL has also generated a positive YTD return of 31.71% so far.

Vista Group International recently informed that the foreign exchange rate for FY2018 final dividend paid to Australian investors in AUD has been set at 0.9643. Dividends will be paid out today on March 22nd, 2019. In late February 2019, the Group announced its financial results for FY2018, reporting spectacular growth and profitability stats across all its business segments. The revenue grew by 23% to $ 130.7 million over FY2017, marking the 5th consecutive year of 20%+ revenue growth. Besides, the EBITDA also increased to $ 29.2 million by 17% and the net profit before tax also rose by 25% over FY2017.

During the year, the Group signed agreements with important large clients including Aeon, Cineworld, Marcus, Odeon and Pathe.


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