eServGlobal's recent fund-raising and debt restructuring has put the company on a firmer footing, creating a healthy cash position to support growth. After a period of restructuring, the core business has a reduced cost base and is starting to show signs of positive contract momentum. HomeSend has used recent investment from the JV partners to strengthen the platform and focus on marketing the service. Successful recovery of the core business combined with adoption of the HomeSend platform should provide upside to the current share price.

With the company now on a more secure footing, the share price has increased from the 4p fund-raising level to the current 6.0p level. Based on a sum-of-the-parts valuation, we calculate a per share value of 10.7p. We value the core business at a discount to mobile software peers to reflect its profitability profile. We assume that the HomeSend JV is successful in reaching break-even in FY17, growing its share of the international remittance market to 2% by FY25. For the value of the JV to be reflected in the share price, investors will need to see regular operational updates tracking new hub members, live corridors, volumes transacted and progress towards profitability.

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