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Aug
27
Posera has big growth opportunities on the horizon
Posted by: Gerry Wimmer
8/27/2017
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Posera Ltd. (TSX: PAY) turnaround is making way for new sales growth in the USA and internationally by expanding its product offerings of Point-of-Sale solutions for the hospitality industry.



We acknowledge that 2017 got off to a slow start for Posera Ltd. (TSX: PAY - C$0.145). The quarterly losses required the Company to raise equity twice this year (the financing were heavily subscribed to by Management) to fund growth opportunities going forward. But going forward is what excites us about Posera, as the Company is on the cusp of realizing major sales growth opportunities for its Point-of-Sale hardware and software solutions.

Ontario-based Posera Ltd. has been supporting merchant business successes in the hospitality industry for more than 30 years. The Company’s products and services facilitate all aspects of the payment transaction between the merchant and the consumer. Posera’s Point-of-Sale (POS) Systems software solutions, associated enterprise management tools and debit/credit payment terminals have been deployed in 25 countries in over 30,000 merchant locations worldwide.

We believe several of Posera’s POS solutions are on the verge of a significant ramp up in sales over the next 12 to 18 months. The Company’s marquee product, called Maitre’D™, expanded its offering with an integrated POS solution targeted for the international hotel industry which, over the last 9 months, has resulted in more than 50 new installations in prestigious hotel properties in Paris, Strasburg, Barcelona and more throughout Europe. Based on the early sales success, the Company says they are now expanding this hotel marketing initiative beyond Europe to include North America.

Posera's Fingerprints™, is a POS solution specifically designed for the quick-service restaurant industry. This POS solution offers customizable screens and layouts for greater efficiency and speed of service for fast food operations. In the Q2 report, the Company reported it crossed a major milestone with the first installation outside of Canada of its Quick Service Restaurant (QSR) POS technology. Posera has begun to deploy its QSR POS solution in the Philippines, leveraging the International expansion of its major customer, Tim Hortons. The Company says the roll out in the Philippines demonstrates that its POS products are well-suited to benefit from International growth occurring in the fast-food industry in the economies of AsiaAfrica, Central and South America.

The biggest catalyst for near-term revenue growth may be derived from Posera’s POS SecureTablePay application, which enables safe, secure and stable "Pay-at-Table” capabilities for the US hospitality marketplace. The Company says that SecureTablePay is first-to-market by being the only semi-integrated EMV (Europay, Mastercard and Visa) and Contactless application allowing restaurant wait staff to totally manage payments, tips and tables remotely from a wireless payment terminal, incorporating Chip and Signature, with end-to-end encryption for the US market.

A key milestone is that the SecureTablePay (STP) product has been certified, or in final stages of certification with four major US-based payment processors. The recent completion of certification of STP with Vantiv, the largest payment processor in the U.S, has advanced the STP product to the final pilot testing phase, with the commercialization of this application expected to commence prior to end of 2017.

The STP platform in the US will be commercialized primarily on a recurring revenue model. According to a recent Company investor presentation, Posera expects a rapid deployment of 2,700 pre-sold licences for STP product, which could yield the Company approximately $4 million in annual recurring revenues for usage of this secure POS payment solution. As more payment processors in the US certify the SecureTablePay solution, the Company will earn more revenues.

It is about a year since we first launched coverage on Posera Ltd. as one of Investorfile’s Top Ideas (See: Posera shares offer investors both value and big upside potential). In hindsight, we might have been a year too early recommending this stock as the Company shareholders have been diluted from the financings completed this year. That said, the share price today is still up 30% since our introductory blog post about the stock.

Because we believe the fore mentioned revenue growth opportunities for Posera’s POS solutions are on the horizon, the Investorfile blog continues to recommend that small cap investors should accumulate shares in the Company from its current trading levels up to a price of C$0.25. Notwithstanding the stock dilution from the recent equity financings, we still feel that small cap investors who own shares in Posera with an average cost base under C$0.25 can realize significant capital gains if the Company’s Management executes on its growth plans.

The Company has approximately 118.4 million shares outstanding.

Posera website: www.posera.com

Author's share ownership disclosure: TSX: PAY - Yes


Read Disclaimer:

This article is for informational purposes only. This article is based on the author's independent analysis and judgment and does not guarantee the information's accuracy or completeness. The information contained in this article is subject to change without notice, and the author assumes no responsibility to update the information contained in this article. The information contained within this article should not be construed as offering of investment advice. Those seeking direct investment advice, should consult a qualified, registered, investment professional. This is not a direct or implied solicitation to buy or sell securities. Readers are advised to conduct their own due diligence prior to considering buying or selling any stock.

Investorfile.com is not engaged in an investor relations agreement with Posera Ltd. nor has it received any compensation from Posera Ltd. the preparation or distribution of this article.

The author of this article has acquired and may trade shares of Posera Ltd. through open market transactions and for investment purposes only.

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Gerry: Thanks for small cap stock suggestions over the past 5-years. Your record is very impressive and your analysis has been excellent over the years. I think small investors (and fund managers) should pay much more attention to your work. I look forward reading your blog over the next 5-years!