Simble Share Price Up 44% in Two Days…Why?

Aussie enterprise Software as a Service (SaaS) company Simble Solutions Ltd [ASX:SIS] have seen staggering gains in their share price over the last 48 hours.

Since closing at 4.9 cents on Wednesday, Simble shares soared over 28% on Thursday, and almost another 16% today at time of writing, to now sit at 7.3 cents apiece.

Simble is an Aussie software company that focuses on energy management for companies through Internet of Things (IoT) solutions.

The small-cap provides mobile software solutions which ‘empower enterprise-wide mobility’.

Their cloud-based products are ‘easy to implement and use’ and allow businesses to ‘visualise, control and monetise their energy systems’.

Last week, Simble provided their half year results for 2019, showing a 72% rise in Operating Revenue, which was driven by a 601% rise in UK revenues thanks to ‘large-scale, multi-year contract wins’.

And it seems this week’s share price hike is driven by further excitement brewing amongst investors over future potential contract wins in the UK.

Simble putting many eggs into UK expansion

In his commentary on the half year results, Simble CEO Fadi Geha said the revenue trend ‘is poised to continue as recently secured sales contracts are starting to materialise’.

We’ve achieved a key milestone in the UK, signing our first energy broker, and continue to see strong demand for our disruptive energy analytics solution suite in the UK market.’

Simble’s UK sales partner Powercor has enabled the company to secure high-profile clients such as Transport for London and Thornton’s Confectionary.

The company plan to allocate additional resources towards the UK expansion strategy to speed up its growth.

In a HotCopper interview on Monday, Mr Geha explained this UK focus:

Our focus at the moment is the UK…because it is actually quite innovative and leading form an energy management point of view.

The UK government introduced legislation that mandated smart meter rollouts by the end of 2020. There will be 53 million smart meters installed across businesses.

What we’re doing is we’re offering our solution to energy retailers, energy brokers and energy consultants to help their end customers.’

Since the interview, HotCopper forums have been floating ideas of Simble being ‘undervalued’ and the potential for ‘plenty of upside’ for the company.

What does the future really look like for Simble?

Small-caps with potential are those who are targeting a market sector that has the lucrative figures behind it.

Simble seem to have this covered, with the global energy management systems market expected to reach US$62.3 billion by 2023.

It’s also important for small-caps to show signs of future growth initiatives, to keep investors interested and optimistic.

Mr Geha did note in the interview, with a smile, that ‘there’ll be some really exciting news to come down the track’ for Simble. However, specifics are yet to be determined.

And it’s not as though Simble have been in an uptrend since day one.

12 months ago, in fact, Simble shares were hovering around the 15-cent mark. That means the company has experienced more than a 50% drop in year-on-year return to date.

Admittedly, Mr Geha also addressed this in the interview:

I do recognise that about a year ago we did hit some headstorms with regards to cost structures…we addressed that… our revenue numbers started growing…cash collection increased…and we’re actually at a really good place, very well positioned.’

Investors seem to agree, based on the last two days of being in the green in trading.

But the ‘ambitious growth targets for 2020 and beyond’ would need to be hit for investors to maintain their support, I’d say.

More to come.

Regards,

Ryan Clarkson-Ledward,

For Money Morning

PS: As you may be aware, small-caps can fall just as steep and quickly as they can rise. But if you’re prepared for the risk, the small-cap sector could prove quite lucrative…if you know where the gems lie. Check out this free report on our three favourite small-caps for 2019 to get you started. Download now.


Ryan Clarkson-Ledward is one of Money Morning’s junior analysts. Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects. Ryan’s primary focus is assisting Sam Volkering with background research and insight for readers by dissecting the latest events affecting the world. Working closely with Sam, they explore the latest in small-cap and technology stocks as well as cryptocurrency opportunities. You can find Ryan’s contributing research, developments, and supporting information across several e-letters, including:


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