Mitula is a ‘vertical search’ website operator that aggregates online classifieds, providing users with the ability to obtain search results from multiple advertisers with one search query. The current portfolio includes over 170 websites in 45 countries and offers four primary verticals: real estate, employment, vehicle sales and fashion. Mitula floated in July 2015 at 75c per share, and has grown visitation to its websites by 40% in the period post listing.

Mitula has a net cash balance sheet; an experienced management team and Board that own 40% of the business and an established, scalable platform that we think remains undervalued despite the recent share price appreciation.

The share price came under pressure in late 2016 due to a disappointing quarterly earnings update. We believe this reflected a short term disruption as Mitula works through the integration of two acquisitions, and accordingly took advantage of the weakness to establish a position for the Fund.

The management team have a clear strategy to improve the monetisation of website visitation, which we believe will drive continued growth in earnings and value for shareholders. Mitula has a net cash balance sheet; an experienced management team and Board that own 40% of the business and an established, scalable platform that we think remains undervalued despite the recent share price appreciation.

Contributed by Jack Collopy, Perpetual Pure Microcap Fund