7:59 cut – BOKU

BOKU – H1 Results

I previously wrote about BOKU when it issued its H1 Update. As they seemed to be tracking behind the level of revenue required to meet the FY forecasts, I expected the outlook statement associated with today’s H1 results to be of particular interest.

Instead we discover that BOKU have found £0.5m – £0.75m down the back of their sofa – in their previous update (on 18th July for period ending 30th June) they said:

Group Revenue for H1 2019 is expected to be in the range of US$22.5 million to US$23 million (2018 US$16.9 million)

Now they report:

Revenues increased 39% to $23.5 million (H1 2018: $16.9 million)

While it is normal practice to be conservative in trading statements, I can’t remember a revenue range given after the period end not including the actual result before. Many companies manage to provide an exact revenue figure two weeks after the period end. I would guess that Boku had over-reserved for charge-backs or equivalent, which I suppose is good news.

Anyway, this updated figure puts H1 revenue at 44.3% of the £53m full year forecast, versus 42.9% in the middle of the previous range. At some point since my last article guidance was further cut to £52m, putting them at 45.2%. They now say:

There’s no question that we need a good second half in order to deliver; we anticipate one and thus leave our guidance unchanged.

While this is stating the obvious, this is the kind of statement that may spook jumpier investors and maybe even trigger market makers to mark down the opening share price.

The share price didn’t immediately react to the earlier H1 trading statement but subsequently fell 25% while revenue has turned out higher and the passage of time has reduced uncertainty. As far as I can see the original investment case is entirely intact and so I will be looking to buy back on weakness over the next few days.

[Edit: I am about to publish a follow-up article commenting on the reliability of their revenue and EPS forecasts]

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