TXT e-solutions

MI: TXT

€117.1m market cap

€9 last close

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

Investment summary

Group organic revenue growth in FY18 was driven by double-digit growth of the aerospace business. TXT started to invest some of its substantial cash pile in H218, acquiring two Italian businesses in the fintech space. This investment should provide growth opportunities for the Banking & Finance business. Increased investment in sales and R&D in FY19 reduces our normalised EPS forecast by 15.5%; we introduce a forecast for 21% EPS growth in FY20. The company continues to assess targets in both business lines and has net cash of €60m available to fund acquisitions.

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 48.4 884.9
2018A 40.0 4.1 1.5 10.28 87.5 51.6
2019E 46.0 5.1 3.8 23.37 38.5 25.5
2020E 49.5 5.9 4.6 28.23 31.9 20.2
Last updated on 22/03/2019
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 22/03/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net cash (€m) 57.7
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (7.6) 13.4 (16.4)
Relative* (10.9) (0.9) (10.8)
52-week high/low €13.5/€7.7
*% relative to local index
Key management
Alvise Braga Illa Chairman
Paolo Matarazzo CFO
Enrico Magni Group CEO

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