TXT e-solutions

MI: TXT

€94.3m market cap

€7.25 last close

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

Investment summary

TXT e-solutions’ focus on long-term customer collaboration combined with recent fintech acquisitions has helped it report revenue and profit growth over the first nine months of FY20 (9M20) despite pressure from COVID-19 restrictions. The company is focused on extending its product offering and broadening its market exposure, with the recent acquisition of HSPI adding consulting services and public sector customers to the Fintech division. We have revised our forecasts to reflect the acquisition and Q3 results, with normalised EPS upgrades of 3.9% in FY20e and 19.3% in FY21e.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 40.0 4.1 1.5 10.25 70.7 N/A
2019A 59.1 7.0 7.6 45.55 15.9 N/A
2020E 67.2 8.1 6.1 35.07 20.7 N/A
2021E 84.2 10.5 8.2 46.69 15.5 N/A
Industry outlook

TXT 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 27/01/2021
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Sector
TMT
Share price graph
Balance sheet
Forecast net cash (€m) 28
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (1.6) (5.5) (22.1)
Relative* 0.3 (18.5) (15.9)
52-week high/low €9.5/€4.6
*% relative to local index
Key management
Enrico Magni Chairman
Daniele Misani CEO
Eugenio Forcinito CFO

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