ASX stock of the day: MSL Solutions (ASX:MSL) shares rise 20%

The MSL Solutions Ltd (ASX: MSL) share price is on fire today, rising almost 20%. Here’s why this ASX payments company is in demand right now
The post ASX stock of the day: MSL Solutions (ASX:MSL) shares rise 20% appeared first on The Motley Fool Australia. –

Rocket launching into space

The MSL Solutions Ltd (ASX: MSL) share price is one of the better performers on the ASX today. At the time of writing, MSL shares are up an impressive 19.23% to 16 cents a share. MSL closed at 13 cents a share yesterday and opened at 14 cents this morning before rocketing as high as 20 cents in early trade. That’s a gain of more than 50%. Of course, MSL has cooled off somewhat since, but 20% is still 20%.

Today’s moves are only the latest bit of good news for MSL Solutions shareholders. On the current pricing, the company is now up 32% since last Wednesday, and 128.5% since November last year.

But who is MSL Solutions? And why are MSL shares rocketing so dramatically today?

Who is MSL?

MSL is a tech company that uses a software-as-a-service (SaaS) platform to provide services to the entertainment, sporting and hospitality sectors. Its software systems allow businesses to ‘connect’ to their customers through entry and exit monitoring, ordering facilities, promotions and end-to-end point of sale payment solutions. It also allows businesses to integrate their own internal operations, facilitating data sharing between ‘front of house’ and ‘back of house’ operations. It also provides “actionable insights on key success metrics to venues of all sizes”.

MSL Solutions currently works with over 5,000 customers, which include names like Golf Australia, the Queensland Cricketers’ Club and the Parramatta Eels NRL team.

Last year, the company signed an agreement with buy now, pay later provider Openpay Group Ltd (ASX: OPY). This agreement allowed customers to use Openpay when buying some products from MSL.

Why is the MSL Solutions share price rising today?

We have seen two major announcements from MSL Solutions over the past 2 days that are likely to be the pricing catalysts behind MSL’s gains today.

Firstly, MSL told the markets yesterday that it has signed a ~$3.5 million, 5-year agreement with the American company ASM Global to provide point of sales payment solutions. This agreement covers 22 “large event venues”, including arenas and racetracks, in the United Kingdom which are operated by ASM. It will see ASM install ~900 terminals that will run MSL software. MSL is set to “ earn a combination of upfront software, hardware and services revenue plus annual support revenue over the initial 5year term”.

Secondly, MSL Solutions released a business update covering the quarter ending 31 March 2021 this morning. In this update, MSL reported its third consecutive quarter of positive operating cash flow. It also saw net cash from operations rise from virtually zero to $1.3 million year on year. MSL tells us that it is on track to record a full year of consistent cash generation from operations, which would be its first since FY2018. The company also reported that it has $4 million in cash on hand as well.

Judging by the MSL share price performance today, and over the past week, investors are clearly liking what they are seeing with the company. At the current share price, MSL Solutions has a market capitalisation of $52.24 million.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post ASX stock of the day: MSL Solutions (ASX:MSL) shares rise 20% appeared first on The Motley Fool Australia.

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