ELMO Software share price soars higher after reporting continued growth trajectory


The ELMO Software (ASX:ELO) share price jumped 47 cents or 7.73% higher to $6.55 in morning trade on Wednesday after the cloud-based payroll and rostering company reported a record level of annual cash receipts of $57.5m through FY20, up 27.4% on FY19.

The company reported a closing cash balance of $139.9m with no debt at 30 June 2020, saying it remains well capitalised to continue investing in organic growth and execute strategic acquisitions.

In June ELMO raised $70m via an institutional placement at an offer price of $7.00 per share. The proceeds were to be used to accelerate organic growth initiatives and to fund
acquisition opportunities.

ELMO shares have subsequently fallen below the placement price despite the company recently updating its annual recurring revenue (ARR) guidance and upgrading its earnings guidance, albeit saying it expected EBITDA to be between negative $2.5m and negative $4.5m.

In June, ELMO was admitted to the ASX 300 index.

ELMO Software CEO, Danny Lessem said the company’s focus remains on delivering organic growth supplemented with strategic acquisitions, continuing its growth trajectory into FY21 and beyond. He said the company is “well placed to benefit from the acceleration in the adoption of cloud-based business tools, including HR technology.”

ELMO advised that it will release its FY20 full year results pre-market open on 6 August 2020.

Established in 2002, ELMO is a cloud-based HR & Payroll software provider. The Company offers customers a unified platform to streamline processes for HR, and also manage payroll and rostering / time & attendance. ELMO operates on a Software as a Service (“SaaS”) business model based on recurrent subscription revenues.

Disclaimer: Author Bruce Jackson has an interest in ELMO shares. 

Here’s how you can strike it rich in the share market…

The best way to strike it rich in the share market is to buy shares that are not only cheap, but growing quickly.

Combining countless hours of research with over 30 years of hands-on stock market investing experience, The Capital Club’s founder Bruce Jackson has just published his definitive list of 3 Cheap and Good ASX Stocks for 2018.

Best of all, the report is absolutely free, exclusively for readers of The Capital Club.

In this comprehensive free report, you’ll find the name of one ASX gold stock that’s not only profitable, but trading at less than 4 times forecast profits.

You’ll also discover the name of a company one fund manager has called the cheapest stock in the ASX 100, and you’ll read about the three catalysts that could push the share price higher in the next six months.

Finally, the report names one of the cheapest retailers trading on the ASX, a company that just picked up the assets of a distressed competitor on the cheap, paying just 2 times earnings. No wonder one top fund manager thinks its share price could at least double.

With the share prices of each of these 3 companies having the potential to double or more, you’ll want to act now. Simply click here or the button below, enter your email address, and this free report will be instantly sent to you.

See the 3 stocks

Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
Bruce Jackson has 30 years of hands on investing experience. He is passionate about stock market investing, running his own portfolio and SMSF. His focus is on small cap growth stocks. You can contact Bruce at brucej@thecapitalclub.com.au