blur Group: Good Bookings Growth

blur Group has announced a more than doubling of project bookings for the full-year to December 2014. The international e-commerce company that operates a leading online platform for buying and selling business services also announced the kick-off of a project that has a total expected value of $3m over a two year period. We are encouraged by the announcements as they show that the blur platform is continuing to grow in popularity. With the growth in bookings in line with our growth in revenue forecast for FY14, we are keeping our forecasts unchanged and continue to estimate EBITDA breakeven in FY16. Assuming that revenues and earnings grow in-line with our expectations, we continue to classify the company as a growth stock.

Bookings Update

For the full-year, bookings increased to $49.1m (FY13: $22.2m). Bookings in H2 increased by 94% to $33.1m (H2 2013: $17.0m), of which enterprise customers accounted for 40% (FY13: c.20%). blur is currently adding >2,000 exchange users to the platform per month, and has a fully vetted service providrs from 145 countires. To date, >50,000 business have adopeted blur’s exchange to buy and sell services online, with >$350m of projects submitted to the platform.

Significant Project Kicked-Off

The project was made by a leading FMCG company, respsonsbile for some fo the world’s next known brands. It represents the largest by an enterprise customer that blur’s exchange has attracted to date.

Forecasts

For FY14, we keep our revenue, gross profit and EBITDA forecasts unchanged at $11.03m, $2.98m and ($8.48m), respectively. We also keep our forecasts unchanged for FY15 and are therefore forecasting revenue of $20.26m, gross profit of $5.27m and EBITDA of ($6.19m). We continue to expect a higher focus on controlling costs, and continue to estimate EBITDA breakeven in FY16.

Valuation

blur’s addressable market is significant and we estimate it reached $265bn in 2013 and will grow to $641bn in 2018. Assuming blur’s share of this market reaches only 1%, we estimate the company could be worth $94.14m (£55.54m). Furthermore, blur shares are trading on a prospective EV/Sales of 0.67x, which compares to the average of similar, but mature, e-commerce companies of 2.2x.