Is 2019 a year of Tech Stocks? A Look at FCT, XF1, BUD, CAG, DUB

Australian Technology Space 2019

So far, the year 2019 has indeed been a revolutionary year for the Australian technology space, with the progress made to be in sync with the global pace. Be it the 5G Boom, Artificial Intelligence, Robotics, the Clean Meat Revolution or Cryptocurrencies, Blockchain or the IoT, the budding economy of Australia has set foot in all spheres.

The country possesses all the skills required to harness technological advances and enhance existing businesses while creating new markets and products. According to the Australian Government, upgrades to the present tech industries and growth of new ones could be worth $315 billion to the economy over the next 10 years. Moreover, automation and utilising the power of machines to perform tasks could significantly boost the Aussie productivity and national income by approximately $2.2 trillion by 2030. Icing on the cake is the prediction that the economic slowdown would not last too long, which means that the technology space is likely to prosper even more in the coming years.

5 Technology Companies in Discussion

On the above backdrop, let us look at the 5 ASX-listed technology sector stocks, and understand their stance amid the Australian tech-boom:

FirstWaves’ FY19 Results and New Partnership

On 30 August 2019, FCT notified the market on annual year report to 30 June 2019, wherein it mentioned that its loss after providing for income tax amounted to $11,007,337. The revenue was $8,831,731, up by 13% on pcp. The cash and cash equivalents increased by $2,278,295 to $8,061,168 at 30 June 2019 and the company had sufficient funds to meet its debts as and when they fall due. A capital raise of $3,404,000 was completed in December 2018, by issuing 24,314,285 ordinary shares, followed by a raise of $6,500,000 and SPP of $1,248,000 in April 2019.

FCT’s FY19 Highlights (Source: FCT Report)

Some of the company’s milestones for the period were the signing of an OEM development and license agreement with Cisco Systems, Inc. FCT expanded into Middle East and Africa by signing a reseller agreement with SHELT Global Ltd and securing its first customer, Telecel. A partnership was signed with NTT Data UK and re-signing of the product and services agreement with Telstra Corporation Ltd (ASX:TLS) took place in the period.

FCT announced that it had secured another level 2 partner reseller agreement in Asia with MobiFone Global, Vietnam, validating the company’s CCSP’s global applicability in Asia. The revenue path progress via this agreement is underway.

Xref Limited’s FY19 Results

As announced on 30 August 2019, XF1 in the full year results closed 30 June 2019, XF1 reported the sales of $10 million, up 42% from $7.1 million in the pcp. The international sales continue to grow representing 19% of the total sales. The recognised revenue (credit usage) amounted to $8.04 million, up 66% from $4.84 million of pcp. The company’s number of active users grew by 55% during the period, to 6,021. The ARPA continued to increase to $13,576 as a result of growing platform adoption. XF1 notified that 229 companies were using its platform via one of 16 integrations, up from 92% on pcp.

(Source: XRF’s Report)

Besides this, XF1 was successful in raising $8 million before costs in September 2018. The company incorporated companies in the US and New Zealand, both wholly owned subsidiaries. On 1 July 2019, XF1 announced the acquisition of RapidID.

On the outlook front, XF1 anticipates FY20 to be a transformational year as it moves from being an automated reference checking provider to a platform offering continuous verification of human capital, from hire to retire.

Buddy Technologies’ Investor Presentation

On 30 August 2019, BUD released an investor presentation, the first since the successful acquisition of LIFX in 2019. In 2019, the company has completed the acquisition of LIFX, had significantly cut its expenses on Buddy Ohm and is growing its Managed Services business. The CY19 LIFX growth is targeted in the range of 70-100% and the Buddy Ohm along with the Managed Services businesses is targeted to meet breakeven by 2019.

BUD’s last 4C Snapshot (Source: BUD’s Report)

Apart from this, BUD has completed 4 consecutive years of growth between 70-100% and is focussed to continue the stance in 2019 as well. A boon for BUD, 1H2019 depicted 83% unit growth over 1H2018. The company notified that it had executed finance facility documentation with Scottish Pacific, for a maximum of A$20 million.

Cape Range’s 1H19 Report

For management purposes, the CAG Group is organised into two strategic units- a corporate HQ in Queensland, Australia and operations and tech development base in Malaysia.

On 30 August 2019, CAG released its 1H19 Report for the six months ending 30 June 2019, stating that it had recorded a LAT of $273,321 in the period, primarily attributable to a 53% decrease in revenue, catalysed by the softening of the Malaysian economy, toppled with the uncertainty prevailing over the abolishment of GST and re-introduction of the sales and services tax in the country. The total revenue stood at $251,003 for the period.

CAG’s P/L Account for 1H19 (Source: CAG’s Report)

Dubber Corporation’s Preliminary FY19 Results

BDO Audit (WA) Pty Ltd is presently completing a financial audit of DUB.

On 30 August 2019, DUB pleasingly released its preliminary FY19 results to 30 June this year, stating that the active number of users rose up by 222% almost 95,000 on pcp, and the operating revenue had soared up by 269% to $5.54 million. During the reporting period, DUB was successful in capital raisings in November 2018 of $5 million and April 2019 of $22 million, leveraging its growth opportunities. As at 30 June 2019, the cash at bank was reported to be $19.6 million.

(Source: DUB’s Report)

Catalysing the tech-savvy world, Co-Founder and MD, Mr Steve McGovern stated that the company’s strategy revolves around two bases- availability of AI and availability of call recording for immediate ‘switch on’, on a monthly ‘Op-Ex’ basis.

As at 30 June 2019, 43 telecommunication carriers were being billed by the company, and a total of 106 had agreed to implement its platform.

ASX listed Stocks’ performance

Let us browse through the respective performance of the stocks of the companies discussed in the article, by the end of the trading session on 30 August 2019, and look at their YTD returns:

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