artec technologies

Investment summary

After a strong FY18 with a number of reference orders, H119 was slower than anticipated. Management remains confident about FY19 (H2 should be stronger than H1 due to year-end budgetary cycles), with additional public service wins indicated in Q4. In media, with the exit of Verizon Volicon from the market management believes artec is well placed to win additional European clients. artec invested in capacity in H119 and raised c €1m of equity capital in July to target these accounts and is considering a convertible bond issue to fund M&A. If management can build on the opportunities outlined, we believe there is significant upside to the shares.