Having missed the June seminar, through being double-booked, I was keen to make it down to this month's meeting and see some new companies. As usual the room was full and there was a certain buzz in the air from the prospect of meeting a brace of interesting companies and getting to ask them searching, but reasonable, questions.

IMImobile

First up were Mike Jefferies (FD) and Matt Hooper (Marketing) from IMImobile. This is a software services company which listed in 2014, to give its venture capital owners an exit route, but has been profitable and generating cash for over a decade. Its core service is that it helps customers deal with clients using mobile devices by linking enterprise systems to channels such as chat and social media. This is clearly a big win for large clients such as O2, the AA, Vodafone and the BBC as it allows them to outsource a technology headache while retaining the benefits of increased call-centre efficiency, fraud detection and improved customer service.

Talking of clients their largest is MTN in Africa, which provides 16% of revenue, while the second largest is a Tier 1 bank in the UK. What's interesting about this revenue is that, by IMImobile's own definition, 90% of it is recurring with 15% coming from fixed fees, 40% is directly usage based and 35% is down to transactional volumes; or, in other words, 75% of all fees rely on volume through the system, 15% is fixed and 10% is non-recurring. This is pretty good as clients want there to be high volumes and the receivables from these blue-chip companies are high quality so cash conversion is very good (typically 100% of EBITDA). Sadly there aren't going to be any dividends for a while (which was a sore point with the audience) and any excess cash will be used for acquisitions and share buy-backs.

On the investor front the share structure is slightly odd in that there are 49m ordinary shares, 11m founder shares and 6m options; so, if you're not careful, it can be easy to value the company incorrectly (fortunately Stockopedia uses the correct figure of 60m shares). Beyond the directors owning 20% of the company institutions own something like 75% of the remaining shares with ToscaFund taking out 25% alone - so there's a certain level of illiquidity here. That said IMImobile is…

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