The Elmo Software (ASX: ELO) share price soared 25% to $2.50 today after the stock hit the ASX boards in an initial public offering that is being touted as one of the hottest tech listings this year.
Elmo provides software solutions to human resources management teams to help them in the hire, fire, retire, human capital management administration processes. As at 31 December 31 2016 it reportedly had 472 mid-market enterprise clients signed up to its software-as-service technology platform.
Elmo now has a market capitalisation around $130 million with 54.1 million shares on issue after the company raised $25 million at the IPO stage via the issue of 12.5 million shares at $2 per share.
At $2 per share and on a $108.3 million market value the company reportedly traded at 3.75x enterprise value to forecast pro forma revenues for FY 2018. The company reported that recurring revenue was approximately 93% of all pro-forma revenue in FY 2016.
It posted a net profit of $191,000 in FY 2016 on revenues $13.5 million, although it is forecasting an $800,000 loss in FY 2017 as a result of rising costs in part associated with the IPO.
Elmo looks a business for the watch list as it looks to prove itself as a public company in the attractive software-as-a-service space.
