Migme Ltd (AX:MIG) is a global social media company employing a freemium model to drive user engagement. It is focused on the emerging markets of Indonesia, the Philippines and India. At 30 June 2016 monthly active users (MAUs) totalled 43 million, an increase of 34% in the last year (32 million in December 2015) and number of artists and verified users increased to 2,900 up 368% since 31 December 2015). On 19 August 2016 MIG raised A$10.2m from an issue of shares at A$0.40/share.
Where to from here?
MIG has successfully built a user base of 43 million, signed some 2,900 artists onto the platform and generated revenue for the last six months of A$14.9m. In the last six months costs grew by A$11.3m compared with revenue growth of A$5.7m and MIG continued to make gross operating losses. The company has incurred A$27.8m operating cash losses in the last 18 months to 30 June 2016. These losses have been funded by equity raises, including funds raised at IPO of A$44m. We understand that MIG expects to reduce the operating cash flow deficits and become cash flow positive in 2017, which is in line with our forecast. The June 2016 quarterly net cash outflows were A$5.1m. Cash on hand at 30 June 2016 was A$4.7m and the August 2016 capital raise brought in another A$10.2m, which could see the company through to profitability.
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