StatPro Group

LN: SOG

£77.6m market cap

118p last close

StatPro Group provides cloud-based portfolio analytics solutions to the global investment community.

Investment summary

StatPro’s FY18 EBITDA was slightly ahead of our expectations, while revenues came in lower than expected. The resulting margin gain reflects management’s determination to improve profitability levels. As we have pointed out previously, margins stand to benefit from the group’s increasing scale and costs dropping out as StatPro’s software platforms are streamlined over the next few years. We have reduced our revenue forecasts by 3% in FY19 and 2% in FY20 while maintaining profit forecasts. In our view, the shares look attractive, given the group’s c £56m recurring revenue book and the declining rating (c 15x FY19e), especially in light of the active M&A backdrop in the financial software sector.

Y/E Dec
Revenue (£m)
EBITDA (£m)
PBT (£m)
EPS (p)
P/E (x)
P/CF (x)
2016A 37.5 5.1 2.7 3.3 35.8 10.3
2017A 49.3 6.8 3.3 5.8 20.3 7.2
2018E 54.7 9.0 5.2 7.3 16.2 6.0
2019E 58.0 9.5 6.2 8.0 14.8 5.0
Last updated on 15/02/2019
Industry outlook

StatPro’s products are targeted at the global wealth management industry. The outlook for fund managers has been showing improvements. PwC estimated global AuM were $84.9tn in 2016 and is expected to rise to $145.4tn in 2025 (6.2% CAGR). Asset managers have a reputation for being slow to adopt digital technology, but StatPro believes this is now changing. It says that many clients are transforming their technology and the middle office, where StatPro is strong, is part of this process. StatPro is the first cloud-based analytics platform targeting the sector and is therefore well-placed to address the market.

Last updated on 15/02/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (£m) 24.6
Forecast gearing ratio (%) 97
Price performance
%
1m
3m
12m
Actual (10.6) (8.2) (31.2)
Relative* (14.5) (10.4) (30.8)
52-week high/low 186.5p/105.0p
*% relative to local index
Key management
Justin Wheatley CEO
Andrew Fabian FD

Content on StatPro Group