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ELO - ELMO SOFTWARE LTD


nipper
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IPO'ed today, raising $25mill and now a $100mill+ company, ELO offers cloud-based software to automate HR processes, and will use the funds raised to boost its market share. Issue price $2.00 and put on 25%.

 

Chief executive Danny Lessem said it was "the perfect time for us to grow". .

"Investor confidence in the tech economy has been growing steadily for years, notwithstanding some market turbulence, and the trend for companies wanting to finance growth and execute expansion plans is getting hotter by the minute.

 

"The big draw card for going to IPO is the potential for sheer transformation in the size, scale and performance of a company ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâہ¡ÃƒÆ’‚ on top of the large injection of cash.." ... "We're not a global player," Mr Lessem said. "We don't have future global aspirations, at least in the near future. We're very focused on being the go-to choice for HR automation within Australia and New Zealand.

 

"In the longer term we will expand further geographically, but right now 96 per cent of organisations in Australia and New Zealand we haven't touched. So our immediate aim is to extend to those organisations."

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  • 3 years later...

Ally Selby (LiveWire): First up, we have ELMO Software, it's the furthest thing from Sesame Street possible. It's a SaaS company and it's got a market cap just shy of $500 million. James, I might start on you. Is it a buy, hold or sell?

 

James Dougherty: (Lennox Capital Partners) :

It is a sell. Look, it competes in a very competitive part of the market, revenue has been growing organically but so has the capitalisation rates of its R&D and the useful life of its intangible assets. If you look at the cashflow, losses have been growing steadily every year
.

 

Ally Selby (LiveWire): Nick, it's about to drop off the S&P Small Ords index when the S&P rebalances at the end of the month. Is it a buy, hold or sell?

 

Nick Guidera: (Eley Griffiths Group):

I think it is a hold for me. I agree with James, it has certainly had its challenges, particularly through COVID19. Organic growth slowed, churn rose, operating leverage really has not been demonstrated in the last three or four years.

 

But I think there is a possibility that it could well be a vaccine beneficiary as businesses start to reinvest in processes, but I'd like to see a better risk-reward.

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  • 1 year later...

ELMO Software announced its preliminary 2022 FY results, reporting strong growth in annualised recurring revenue, cash receipts and improved operating cash flow. CEO Danny Lessem said that FY22 was a strong year for the ELMO Group underpinned by high growth and increasing operating leverage.

  • The Group recorded underlying EBITDA of $7.1 million, up $6.5 million pcp and above the top end of the upgraded guidance range.
  • The cash balance was $47.9 million.
  • Total operating cash outflow reduced to negative $17.4 million, a 34% improvement pcp.
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