Last close As at 05/08/2026
EUR15.00
— 0.00 (0.00%)
Market capitalisation
EUR709m
Research: TMT
Management believes the COVID-19 pandemic will have the greatest impact on Tinexta’s profitability in the current financial quarter, before an anticipated recovery later in FY20. There is a confident message on cost savings and ongoing efficiencies to help mitigate some of the expected decline in revenue. We downgrade our forecasts to reflect a slower recovery in Digital Trust and a lower margin in Credit Information & Management. The EV/EBITDA multiple for FY20e is 8.9x.
Tinexta |
Looking forward to recovery |
H120 results |
Professional services |
26 May 2020 |
Share price performance
Business description
Next events
Analysts
Tinexta is a research client of Edison Investment Research Limited |
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Management believes the COVID-19 pandemic will have the greatest impact on Tinexta’s profitability in the current financial quarter, before an anticipated recovery later in FY20. There is a confident message on cost savings and ongoing efficiencies to help mitigate some of the expected decline in revenue. We downgrade our forecasts to reflect a slower recovery in Digital Trust and a lower margin in Credit Information & Management. The EV/EBITDA multiple for FY20e is 8.9x.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
238.7 |
48.3 |
0.74 |
0.23 |
15.3 |
2.0 |
12/19 |
258.7 |
45.7 |
0.65 |
0.00 |
17.4 |
0.0 |
12/20e |
250.8 |
48.6 |
0.71 |
0.23 |
15.9 |
2.0 |
12/21e |
263.5 |
53.8 |
0.79 |
0.26 |
14.3 |
2.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q120 results: Affected by COVID-1
Tinexta’s Q120 results showed the first impacts of the COVID-19 pandemic, with an organic revenue decline of 8.4% and a decline in adjusted EBITDA of 29.6%. The revenue declines were greater than we anticipated in Digital Trust and Innovation & Marketing Services, albeit the latter had a very strong comparative in Q119. All business units saw a decline in profitability given the speed and extent of the slowdown towards the end of the period. On the positive side, free cash flow generation improved significantly due to positive management of working capital. Management has said that it will provide new financial guidance for FY20 in late June: Q220 is expected to be the weakest period for growth, but recovery is anticipated thereafter.
Forecasts: FY20 EBITDA downgraded by 5.8%
We downgrade our FY20 EBITDA forecast by 5.8% due to a combination of declines reported in Q120, the assumption of a slower recovery in Digital Trust and a greater margin impact on Credit Information & Management. The downgrade takes our EBITDA forecast for FY20 to €71.3m, which is in line with reported EBITDA for FY19. Although there is no formal guidance, management does not expect ‘great discontinuities compared to the previous year’, as further cost savings and efficiencies are sought.
Valuation: Strong rebound in valuation
Multiples have increased given the recent strong share price performance and our downgrades to estimates. The EV/Sales multiples for FY20e and FY21e are 2.5x and 2.4x respectively. These compare with the long-term average since IPO of 1.8x, reflecting a better medium-term growth outlook from the newer group structure following M&A, and the resulting higher EBITDA margin of 29.7% in FY19 versus 18.8% in FY15.The EV/EBITDA multiples for FY20e and FY21e are 8.9x and 8.5x versus the long-term average since IPO of 8.5x.
Q120 results: Affected by COVID-19
Tinexta’s Q120 results showed the first signs of the impact of COVID-19 against a strong comparative in Q119. The first quarter is typically a seasonally less important quarter in the financial year. Organic revenue declined by 8.4% and organic EBITDA before non-recurring items declined by 25.5% at the business unit level. At the group level, ie including central corporate costs, the organic decline for adjusted EBITDA was 29.6% to €11.0m, as central costs increased by 12.6% to €1.9m.
Exhibit 1: Tinexta’s quarterly revenue and profitability progression
€000s |
Q119 |
Q219 |
H119 |
Q319 |
Q419 |
H219 |
FY19 |
Q120 |
Revenue |
||||||||
- Digital Trust |
25,192 |
26,553 |
51,745 |
25,067 |
29,843 |
54,910 |
106,655 |
25,932 |
- Credit Information & Management |
19,364 |
18,548 |
37,912 |
14,804 |
19,570 |
34,374 |
72,286 |
16,987 |
- Innovation & Marketing Services |
15,178 |
21,757 |
36,935 |
14,705 |
28,141 |
42,846 |
79,781 |
11,992 |
Total |
59,734 |
66,858 |
126,592 |
54,576 |
77,554 |
132,130 |
258,722 |
54,911 |
Organic growth y-o-y (%) |
||||||||
- Digital Trust |
9.5 |
10.5 |
10.0 |
11.2 |
12.9 |
12.1 |
11.1 |
2.9 |
- Credit Information & Management |
(3.1) |
(10.2) |
(6.7) |
(13.9) |
(3.8) |
(8.3) |
(7.5) |
(12.3) |
- Innovation & Marketing Services |
32.9 |
7.6 |
16.7 |
(10.0) |
24.1 |
9.8 |
12.9 |
(22.3) |
Total |
10.2 |
3.3 |
6.4 |
(2.5) |
11.8 |
5.4 |
5.9 |
(8.4) |
EBITDA (before non-recurring items) |
||||||||
- Digital Trust |
5,984 |
7,374 |
13,358 |
7,710 |
8,502 |
16,212 |
29,570 |
5,919 |
- Credit Information & Management |
5,289 |
4,240 |
9,529 |
3,144 |
4,809 |
7,953 |
17,482 |
3,584 |
- Innovation & Marketing Services |
5,927 |
11,451 |
17,378 |
5,821 |
14,749 |
20,570 |
37,948 |
3,396 |
Subtotal (before central costs) |
17,200 |
23,065 |
40,265 |
16,675 |
28,060 |
44,735 |
85,000 |
12,899 |
EBITDA Margin (%) |
||||||||
- Digital Trust |
23.8 |
27.8 |
25.8 |
30.8 |
28.5 |
29.5 |
27.7 |
22.8 |
- Credit Information & Management |
27.3 |
22.9 |
25.1 |
21.2 |
24.6 |
23.1 |
24.2 |
21.1 |
- Innovation & Marketing Services |
39.0 |
52.6 |
47.1 |
39.6 |
52.4 |
48.0 |
47.6 |
28.3 |
Total |
28.8 |
34.5 |
31.8 |
30.6 |
36.2 |
33.9 |
32.9 |
23.5 |
Organic growth y-o-y (%) |
||||||||
- Digital Trust |
10.1 |
4.5 |
6.9 |
14.2 |
15.9 |
15.1 |
11.3 |
(1.1) |
- Credit Information & Management |
15.6 |
(2.5) |
6.9 |
(19.6) |
1.1 |
(7.8) |
(0.4) |
(32.2) |
- Innovation & Marketing Services |
98.3 |
10.8 |
30.2 |
(27.3) |
16.3 |
(0.3) |
11.7 |
(44.0) |
Total |
33.5 |
6.3 |
16.3 |
(10.6) |
13.4 |
3.3 |
9.0 |
(25.5) |
Source: Tinexta accounts, Edison Investment Research
Versus the expectations set out in our update note published on 15 April 2020, revenue growth for Digital Trust and Innovation & Marketing Services was lower than expected, but revenue growth for Credit Information & Management was roughly in line.
Digital Trust was affected by a significant slowdown in the Camerfirma business in Spain, as the start of the economic slowdown coincided with a number of contract renewals, as well as a smaller impact on the other businesses (InfoCert, Sixtema and Visura). Management believes the impact on Camerfirma should be short-lived and its near-term outlook is more positive than during Q120.
For Credit Information & Management, the real estate business was flat, performing better than we expected as existing work sustained the business through the early part of the lockdown. Conversely, the core credit information business was marginally worse than expected, with economic weakness affecting both financial and corporate customers.
Quarterly trends for Innovation & Marketing Services, notably for Warrant Hub, tend to be quite volatile, as can be seen by the organic growth trends in Exhibit 1. The comparative from Q119 was very strong, when organic revenue growth of 32.9% y-o-y was recorded.
The decline in EBITDA was greater than expected, most notably in Credit Information & Management. In the near term, a higher level of operational gearing reflected the speed and extent of the economic lockdown. Performance in Credit Information & Management suggests that it may be becoming more difficult to find further cost savings following the cost cutting, which helped improve its margin in FY19 to 24.2% from 21.2% in FY18 despite an organic revenue decline of 7.5%. On area of potential growth post the COVID-19 pandemic is that of consultancy to SMEs to obtain Italian government guarantees that allow banks to offer very low cost financing.
Cash flow & balance sheet: Strong improvement in FCF
Free cash flow (FCF) improved to €20.1m from €17.9m in Q119 despite lower profitability, representing an improvement in FCF generation (relative to sales) of 36.6% from 30.0% in Q119. Operating cash flow improved by 7%, by €1.5m to €22.4m, with a strong improvement in working capital, and the investment in tangible and intangibles assets declined by €0.7m, from €3.0m to €2.3m.
At the period end, the net financial position had improved to €111.4m from €129.1m at the end of FY19. The total net financial position, which includes non-current financial assets, reduced from €128.0m to €110.1m.
Outlook: Revised FY20 guidance expected in late June
Management continues to believe the current outlook is too uncertain to provide updated financial guidance for FY20. It now expects to provide guidance by the end of June 2020, ie a month before the Q220 results. However, at the group level it does not expect to see ‘great discontinuities compared to the previous year’, which we assume to mean at the reported EBITDA level, ie €71.3m in FY19. This compares with our prior EBITDA forecast for FY20 of €75.6m. The current financial quarter should be the period that witnesses the greatest impact of COVID-19 and the lockdowns. By the end of June, management will have better visibility on group performance through to the end of May. Thereafter, management expects performance to improve.
The current financial year should benefit from the internal initiatives on the implementation of CRM, and management is proactively reducing costs. For example, personnel costs have been a great focus, with up to 170 employees from a total of c 1,300 employees placed on furlough.
Forecast changes
Our group revenue forecast for FY20 is relatively unchanged, with a reduction in our organic revenue growth assumption of 20bp from -3.0% to -3.2%. Our forecast for EBITDA before non-recurring costs in FY20 falls by 5.8% to €71.3m from €75.6m. Following our downgrade on 15 April, the cumulative downgrade to FY20e EBITDA is 11% (from €80.0m).
Exhibit 2: Forecast changes
€000s |
FY19 |
FY20e |
FY21e |
||||
Old |
New |
Change % |
Old |
New |
Change % |
||
Revenue |
|||||||
- Digital Trust |
106,655 |
110,522 |
108,091 |
(2.2) |
121,574 |
118,900 |
(2.2) |
- Credit Information & Management |
72,286 |
61,189 |
65,046 |
6.3 |
59,354 |
63,095 |
6.3 |
- Innovation & Marketing Services |
79,781 |
79,319 |
77,635 |
(2.1) |
83,284 |
81,517 |
(2.1) |
Total |
258,722 |
251,030 |
250,772 |
(0.1) |
264,212 |
263,511 |
(0.3) |
Organic growth y-o-y (%) |
|||||||
- Digital Trust |
11.1 |
3.6 |
1.3 |
(2.3) |
10.0 |
10.0 |
0.0 |
- Credit Information & Management |
(7.5) |
(13.9) |
(9.1) |
4.8 |
(3.0) |
(3.0) |
0.0 |
- Innovation & Marketing Services |
12.9 |
(1.1) |
(5.5) |
(4.4) |
5.0 |
5.0 |
0.0 |
Total |
5.9 |
(3.0) |
(3.2) |
(0.2) |
5.3 |
5.1 |
(0.2) |
EBITDA before non-recurring costs |
|||||||
- Digital Trust |
29,570 |
30,730 |
29,570 |
(3.8) |
34,046 |
32,813 |
(3.6) |
- Credit Information & Management |
17,482 |
14,153 |
11,690 |
(17.4) |
13,602 |
11,105 |
(18.4) |
- Innovation & Marketing Services |
37,948 |
37,763 |
37,010 |
(2.0) |
39,746 |
38,951 |
(2.0) |
sub-total |
85,000 |
82,646 |
78,270 |
(5.3) |
87,394 |
82,868 |
(5.2) |
- Other |
(8,173) |
(7,000) |
(7,000) |
0.0 |
(7,350) |
(7,350) |
0.0 |
Total |
76,827 |
75,646 |
71,270 |
(5.8) |
80,044 |
75,518 |
(5.7) |
EBITDA Margin (%) |
|||||||
- Digital Trust |
27.7 |
27.8 |
27.4 |
(0.4) |
28.0 |
27.6 |
(0.4) |
- Credit Information & Management |
24.2 |
23.1 |
18.0 |
(5.2) |
22.9 |
17.6 |
(5.3) |
- Innovation & Marketing Services |
47.6 |
47.6 |
47.7 |
0.1 |
47.7 |
47.8 |
0.1 |
sub-total |
32.9 |
32.9 |
31.2 |
(1.7) |
33.1 |
31.4 |
(1.6) |
Total |
29.7 |
30.1 |
28.4 |
(1.7) |
30.3 |
28.7 |
(1.6) |
Source: Edison Investment Research
The FY20e revenue change reflects lower revenue growth in Q120, as well as a reduction in the rate of recovery for Digital Trust in H220e to c 3% from c 5% and a shallower downturn for the real estate business, ReValuta, in the Credit Information & Management business unit.
We assume a lower EBITDA margin in FY20e for Digital Trust given the lower revenue growth mentioned above, and a lower margin for Credit Information given the impact on its margin in Q120.
Our underlying assumptions for FY21 are unchanged, with the absolute changes due to lower base forecasts flowing through from FY20.
Valuation
The share price has rebounded strongly to €11.32 following the sell-off due to concerns about the impact of COVID-19, which took it down to €7.28. When coupled with our downgrades, the relative valuation has increased. At the current share price, the EV/Sales multiples for FY20e and FY21e are 2.5x and 2.4x respectively. These compare with the long-term average since IPO of 1.8x, which reflects a better medium-term growth outlook and higher EBITDA margin of 29.7% in FY19 versus 18.8% in FY15.
The EV/EBITDA multiples for FY20e and FY21e are 8.9x and 8.5x versus the long-term average since IPO of 8.5x.
Exhibit 3: Financial summary
€'k |
2016 |
2017 |
2018 |
2019 |
2020e |
2021e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||
Revenue |
|
|
146,920 |
174,790 |
238,701 |
258,722 |
250,772 |
263,511 |
Operating costs |
(116,673) |
(135,938) |
(172,119) |
(181,895) |
(179,502) |
(187,993) |
||
EBITDA before non-recurring costs |
|
|
30,247 |
38,852 |
66,582 |
76,827 |
71,270 |
75,518 |
EBITDA |
|
|
29,274 |
40,630 |
65,958 |
71,287 |
71,270 |
75,518 |
Normalised operating profit |
|
|
18,447 |
28,959 |
50,763 |
51,027 |
51,816 |
56,923 |
Amortisation of acquired intangibles |
0 |
0 |
0 |
0 |
0 |
0 |
||
Exceptionals |
(1,029) |
(1,861) |
(2,849) |
(3,529) |
0 |
0 |
||
Share-based payments |
0 |
0 |
0 |
0 |
0 |
0 |
||
Reported operating profit |
17,418 |
27,098 |
47,914 |
47,498 |
51,816 |
56,923 |
||
Net Interest |
(1,042) |
1,523 |
(2,520) |
(4,149) |
(1,924) |
(1,624) |
||
Joint ventures & associates (post tax) |
13 |
4 |
106 |
(1,139) |
(1,253) |
(1,503) |
||
Exceptionals |
0 |
0 |
0 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
17,418 |
30,486 |
48,349 |
45,739 |
48,640 |
53,796 |
Profit Before Tax (reported) |
|
|
16,389 |
28,625 |
45,500 |
42,210 |
48,640 |
53,796 |
Reported tax |
(4,784) |
(8,420) |
(12,564) |
(13,432) |
(14,349) |
(15,870) |
||
Profit After Tax (norm) |
12,334 |
21,519 |
34,998 |
31,184 |
34,291 |
37,926 |
||
Profit After Tax (reported) |
11,605 |
20,205 |
32,936 |
28,778 |
34,291 |
37,926 |
||
Minority interests |
(51) |
(78) |
(586) |
(597) |
(711) |
(787) |
||
Discontinued operations |
0 |
0 |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
12,283 |
21,441 |
34,412 |
30,587 |
33,581 |
37,141 |
||
Net income (reported) |
11,554 |
20,127 |
32,350 |
28,181 |
33,580 |
37,139 |
||
Average number of shares outstanding (m) |
37 |
46 |
46.6 |
46.9 |
47.2 |
47.2 |
||
EPS - basic normalised (€) |
|
|
0.33 |
0.46 |
0.74 |
0.65 |
0.71 |
0.79 |
EPS - diluted normalised (€) |
|
|
0.33 |
0.46 |
0.74 |
0.65 |
0.71 |
0.79 |
EPS - basic reported (€) |
|
|
0.31 |
0.43 |
0.69 |
0.60 |
0.71 |
0.79 |
Dividend (€) |
0.09 |
0.14 |
0.23 |
0.00 |
0.23 |
0.26 |
||
Revenue growth (%) |
18.3 |
19.0 |
36.6 |
8.4 |
(-3.1) |
5.1 |
||
EBITDA Margin before non-recurring costs (%) |
20.6 |
22.2 |
27.9 |
29.7 |
28.4 |
28.7 |
||
Normalised Operating Margin |
12.6 |
16.6 |
21.3 |
19.7 |
20.7 |
21.6 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
216,369 |
275,773 |
307,147 |
316,738 |
309,284 |
303,298 |
Intangible Assets |
200,690 |
260,630 |
272,104 |
269,935 |
267,560 |
265,065 |
||
Tangible Assets |
7,050 |
8,287 |
8,232 |
21,215 |
16,136 |
12,646 |
||
Investments & other |
8,629 |
6,856 |
26,811 |
25,588 |
25,588 |
25,588 |
||
Current Assets |
|
|
122,590 |
125,844 |
143,406 |
139,350 |
178,770 |
214,090 |
Stocks |
1,001 |
2,072 |
1,344 |
1,145 |
1,110 |
1,166 |
||
Debtors |
50,948 |
80,285 |
86,321 |
89,775 |
87,016 |
91,437 |
||
Cash & cash equivalents |
60,431 |
36,987 |
35,136 |
33,600 |
75,814 |
106,657 |
||
Other financial assets |
6,352 |
4,311 |
8,186 |
6,593 |
6,593 |
6,593 |
||
Other |
3,858 |
2,189 |
12,419 |
8,237 |
8,237 |
8,237 |
||
Current Liabilities |
|
|
(89,792) |
(102,868) |
(194,356) |
(160,441) |
(158,115) |
(160,605) |
Creditors |
(33,185) |
(47,725) |
(93,905) |
(92,675) |
(90,349) |
(92,839) |
||
Tax and social security |
(1,481) |
(6,125) |
(704) |
(2,911) |
(2,911) |
(2,911) |
||
Short term borrowings |
(36,947) |
(21,723) |
(97,380) |
(62,001) |
(62,001) |
(62,001) |
||
Other |
(18,179) |
(27,295) |
(2,367) |
(2,854) |
(2,854) |
(2,854) |
||
Long Term Liabilities |
|
|
(119,246) |
(155,535) |
(110,823) |
(146,220) |
(146,220) |
(146,220) |
Long term borrowings |
(100,839) |
(123,800) |
(70,667) |
(107,039) |
(107,039) |
(107,039) |
||
Other long term liabilities |
(18,407) |
(31,735) |
(40,156) |
(39,181) |
(39,181) |
(39,181) |
||
Net Assets |
|
|
129,921 |
143,214 |
145,374 |
149,427 |
183,719 |
210,564 |
Minority interests |
(187) |
(537) |
(3,757) |
(3,859) |
(4,570) |
(5,357) |
||
Shareholders' equity |
|
|
129,734 |
142,677 |
141,617 |
145,568 |
179,149 |
205,207 |
CASH FLOW |
||||||||
Operating cash flow |
|
|
20,038 |
32,151 |
43,404 |
55,214 |
56,136 |
56,158 |
Capex |
(5,745) |
(6,486) |
(13,095) |
(13,527) |
(12,000) |
(12,610) |
||
Acquisitions/disposals |
(36,993) |
(61,072) |
(33,182) |
(47,463) |
(28,000) |
0 |
||
Net interest |
(1,017) |
(1,526) |
(1,441) |
(2,472) |
(1,924) |
(1,624) |
||
Equity financing |
48,179 |
1,078 |
1,080 |
1,078 |
0 |
0 |
||
Dividends |
(3,820) |
(6,977) |
(12,067) |
(16,396) |
0 |
(11,081) |
||
Borrowings |
19,398 |
15,170 |
17,317 |
23,714 |
0 |
0 |
||
Other |
1,076 |
4,219 |
(3,866) |
(1,683) |
28,000 |
0 |
||
Net Cash Flow |
41,116 |
(23,443) |
(1,850) |
(1,535) |
42,213 |
30,843 |
||
Opening net debt/(cash) |
|
|
46,879 |
68,333 |
103,844 |
123,792 |
127,974 |
85,761 |
FX |
0 |
0 |
0 |
0 |
0 |
0 |
||
Other non-cash movements |
(62,570) |
(12,068) |
(18,098) |
(2,647) |
0 |
0 |
||
Closing net debt/(cash) |
|
|
68,333 |
103,844 |
123,792 |
127,974 |
85,761 |
54,918 |
Source: Company accounts / Edison Investment Research
|
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Research: Healthcare
SymBio will be presenting data at the European Society of Hematology (EHA) meeting from its pivotal study in Japan of Treakisym (bendamustine) in combination with rituximab for the treatment of diffuse large B-cell lymphoma (DLBCL). The 38-patient, single-arm study showed a 76% overall response rate (ORR), with 47% of patients achieving a complete response (CR). This gives us a high degree of confidence in the label expansion for this population submitted in May 2020.