Edison Issues Initiation on eServGlobal (ESG)

LONDON, September 5, 2016 /PRNewswire/ --

eServGlobal's recent fund-raising and debt restructuring has put the company on a firmer footing, creating a healthy cash position to support growth. After a period of restructuring, the core business has a reduced cost base and is starting to show signs of positive contract momentum. HomeSend has used recent investment from the JV partners to strengthen the platform and focus on marketing the service. Successful recovery of the core business combined with adoption of the HomeSend platform should provide upside to the current share price.

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With the company now on a more secure footing, the share price has increased from the 4p fund-raising level to the current 6.0p level. Based on a sum-of-the-parts valuation, we calculate a per share value of 10.7p. We value the core business at a discount to mobile software peers to reflect its profitability profile. We assume that the HomeSend JV is successful in reaching break-even in FY17, growing its share of the international remittance market to 2% by FY25. For the value of the JV to be reflected in the share price, investors will need to see regular operational updates tracking new hub members, live corridors, volumes transacted and progress towards profitability.

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All reports published by Edison are available to download free of charge from its website http://www.edisoninvestmentresearch.com.

About Edison: Edison is an international equity research firm with a team of over 110 analysts, investment and roadshow professionals and works with both large and smaller capitalised companies, blue chip institutional investors, wealth managers, private equity and corporate finance houses to support their capital markets activity. Edison provides services to more than 420 retained corporate and investor clients from offices in London, New York, Frankfurt, Sydney and Wellington. Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

For more information please contact: 

Katherine Thompson
Edison Investment Research
+44-(0)20-3077-5730

Dan Ridsdale
Edison Investment Research
+44-(0)20-3077-5729
[email protected]

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SOURCE Edison Investment Research

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