TXT e-solutions

MI: TXT

€122.8m market cap

€9.44 last close

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

Investment summary

TXT reported strong organic revenue growth in both divisions in Q219, which combined with the contribution from recent acquisitions, translated into strong growth in EBIT and improved EBIT margins year-on-year. Recent acquisitions have been integrated and provide the potential for cross-selling in the banking & finance division, while the aerospace business has seen significant contract wins in North America. We have revised our forecasts to reflect stronger revenues, higher operating costs and higher tax rates in FY19 and FY20.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 35.9 3.5 3.0 18.59 50.8 928.1
2018A 40.0 4.1 1.5 10.28 91.8 54.2
2019E 57.4 5.8 6.1 33.54 28.1 31.6
2020E 64.4 7.2 6.0 32.45 29.1 18.1
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 11/11/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net cash (€m) 50.3
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 14.6 14.4 14.0
Relative* 8.2 (0.5) (5.2)
52-week high/low €10.0/€7.7
*% relative to local index
Key management
Alvise Braga Illa Chairman
Eugenio Forcinito CFO
Enrico Magni Group CEO

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