Buddy share price leaps 18% following letter to shareholders

The Buddy Technologies share price leapt 18% higher today following a letter to shareholders from the company's CEO.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Buddy Technologies Ltd (ASX: BUD) share price jumped higher today. In afternoon trading, the Buddy share price was up more than 18% to close the day's trade at 5.1 cents. The increase came after the release of the company's unaudited July 2020 results in a letter to shareholders from chief executive officer, David McLauchlan. 

Today's gains follow on a series of strong trading days that have seen the Buddy share price rocket 70% higher in August. Year to date, Buddy's share price is up 30%. Though shareholders who bought as recently as 23 July would be sitting on gains of 420%.

What does Buddy Technologies do?

Founded in 2006, Buddy Technologies provides cloud-based technology that aims to make its customers' work and living spaces smarter, via IoT (internet of things) connected devices.

Buddy is a leading provider of smart lighting solutions. The company's Wi-Fi-enabled lights are currently used in nearly 1 million homes and sold in over 100 countries.

The company's platforms include Buddy Cloud, allowing access to storage and data from any environment and Buddy Ohm. Buddy Ohm is intended to improve operations, savings and sustainability by providing real time building operational data.

What did Buddy's letter to shareholders say today?

In his letter to shareholders, chief executive officer David McLauchlan announced that July had just marked the company's first earnings before interest, tax, depreciation and amortisation (EBITDA) positive month in 2020. Consolidated revenue came in at $4.9 million. That was up 90% from June and 80% from July 2019.

McLauchlan noted that government subsidies related to COVID-19 were down 66% from June. That means that July's unaudited customer revenue was up 138% from June and 72% from July 2019.

The company's total current assets also increased 18% over the previous month, to $10.7 million. That includes cash holding of $1.9 million.

Looking ahead, McLauchlan cautioned investors to set appropriate short-term expectations, noting investors "should not necessarily expect linear or 'straight line' results from here on out. This month's results were strong in large part because of significant deliveries of LIFX White lights."

But McLauchlan assured that the remainder of the year still holds a lot of promise for the company, with record orders of LIFX White lights received last week portending a strong October. He said demand across the board remains high.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Three businesspeople leap high with the CBD in the background.
Share Market News

Boom! ASX 200 blasts to new record highs

ASX 200 investors just sent the benchmark index into uncharted territory.

Read more »