TXT e-solutions

MI: TXT

€108m market cap

€8.3 last close

TXT e-solutions provides IT, consulting and R&D services to aerospace, aviation, automotive, banking and finance customers.

Investment summary

With the acquisition of Assioma, TXT continues to deploy its substantial cash pile. The deal doubles the size of its financial institution-focused software testing business and is earnings accretive. The company announced strong Q119 revenue and net income growth, with a particularly good performance from the Aerospace, Aviation & Automotive business. We have revised our forecasts to reflect the acquisition and Q1 results, with EPS upgrades of 31% and 22% in FY19 and FY20 respectively.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 35.9 3.5 3.0 18.59 44.6 816.1
2018A 40.0 4.1 1.5 10.28 80.7 47.6
2019E 54.3 5.5 5.2 30.64 27.1 27.5
2020E 61.2 7.3 5.9 34.46 24.1 15.9
Last updated on 16/05/2019
Industry outlook

TXT Next is a beneficiary of the trend to outsource elements of IT and engineering, which gives the customer greater flexibility on cost and better access to specialist skills. Its main focus is on the aerospace and aviation market, where the rapid pace of innovation, combined with increasing regulation, drives growth in R&D. It also serves the Italian banking market, where the emergence of fintech companies is driving innovation, and regulation is increasing the need for software quality assurance.

Last updated on 16/05/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net cash (€m) 50.1
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (10.8) (15.2) (30.6)
Relative* (7.4) (18.4) (21.9)
52-week high/low €11.9/€7.7
*% relative to local index
Key management
Alvise Braga Illa Chairman
Paolo Matarazzo CFO
Enrico Magni Group CEO

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