NEA And LVT Stocks Under Pressure On Friday Even After Record Results

  • Jul 15, 2019 AEST
  • Team Kalkine
NEA And LVT Stocks Under Pressure On Friday Even After Record Results

Every company releases its reports on a quarterly as well as on an annual basis, which helps the stakeholders to understand how the company has performed in the given particular period. It also provides a quick idea about the extent of progress made by the company during a specific period and helps the stakeholders make projections and relative analysis.

The reports not only help the stakeholders, but it also helps the company’s management to understand its business operations for a particular period. They can identify the shortcomings for the period and thus work on them to get a better result in the next cycle. The reports also help to understand margins like operating margin and net profit margin. Operating margin information helps to know how the company has controlled its operating expenses, and the net profit margin helps to understand the amount of money left with the company after meeting all its expenses.

The reports also help the company to frame their outlook and guidance for the upcoming periods.

In this piece of the article, we would be covering two such companies which have performed well during the period; however, post the reports their stock price has been under pressure on ASX. Below is the overview of the announcement made by the company.

Nearmap Ltd

About the company: Nearmap Ltd (ASX: NEA) is a company from the industrial sector which supports the government as well as businesses to have a deeper understanding of the premium geospatial content as a service.

Recent Update: On 12 July 2019, the company announced its FY2019 preliminary results. The company anticipates another year of record growth in the Annualised Contract Value (ACV) based on the final audit. The closing Annualised Contract Value portfolio had grown up by 36% to $90.2 mn as compared to the previous corresponding period.

In North America, the ACV portfolio as at 30 June 2019 increased by 76% to $22.7 mn. The North America ACV in the present scenario consists of 36% of the Group Portfolio. The strong sales team contribution ratio is anticipated to be more than 100%, which includes the opening of the second NA sales office in New York along with headcount growth in the second half.

In Australia and New Zealand, the company witnessed a 19% growth in the ACV portfolio to $57.9 mn as at 30 June 2019, improving its market leadership position. From these regions as well, the company expects its sales contribution ratio to be more than 100%.

The cash balance of the group at the end of FY2019 on 30 June 2019 was $7.9 mn. The company used $9 mn of the capital raised to accelerate its growth initiatives, which included:

  • Targeted US sales and marketing initiatives.
  • Expansion of Product and content.
  • First commercial sale of AI content.

Stock performance: In the previous six months, the NEA has generated a return of 80.54%. By the closure of the trading period on 12 July 2019, the price of NEA share was at A$3.340, down by 9.485% as compared to its previous closing price. On 15 July 2019, NEA continued to fall further and trading at A$ 3.320, down by 0.599% (AEST: 1:09 PM). NEA has a market cap of ~ A$1.5 bn and ~ 448.28 mn outstanding shares.

LiveTiles Limited

About the company: LiveTiles Limited (ASX: LVT) is a company from the IT sector and is engaged in the development as well as the sale of business software in Australia and worldwide.

Recent Update: On 12 July 2019, the company announced a record quarter of annualised recurring revenue (ARR) growth which reached $40.1 mn as at 30 June 2019.

The fourth quarter of FY2019 was a record quarter for the company. It made an organic ARR growth of $5.6 mn, which is 65% above the previous corresponding period. The company has reported a 167% ARR growth in the last 12 months and up to 10 times as compared to 2 years ago. Further, during the reporting period, the company had acquired businesses. These businesses have performed well with strong cross-selling and bundling potential in FY2020 and beyond. The repeat revenue from Hyperfish is up by 425% post its purchase.

Apart from the significant customer wins during the period, the company also launched an AI-enabled intelligent search platform with Search365, its strategic partner. It also entered into a partnership with Microsoft on the global launch of “home sites”, and pharma company Novartis, which is now LVT’s new Wizdom customer. The company also launched LiveSmiles, which is the intelligent corporate wellness product of the company.

Cash Flow Update: The company in the fourth quarter delivered record customer cash receipts, with the net operating cash flow improving during the period. Further, the company received A$1.4 mn from New York State concerning its Rochester operations.

Outlook: The company reported that it would continue its investment in its products, partners as well as sales and marketing channels, which in turn would help the LVT in delivering strong customer and revenue growth in FY2020. By 30 June 2021, the key objective of the company would remain to grow ARR not less than $100 mn organically.

Stock performance: In the previous six months, the LVT has generated a return of 56.52%. By the closure of the trading period on 12 July 2019, the price of LVT share was A$0.540, down by 2.703% as compared to its previous closing price. On 15 July 2019, LVT has bounced back and is trading at A$0.545 up by 0.926% (AEST: 1:31 PM), LVT has a market cap of ~ A$ 353.08 mn and ~ 653.86 mn outstanding shares.


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