Last close As at 06/08/2026
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Market capitalisation
EUR709m
Research: TMT
Tinexta’s Q121 results highlighted strong growth in organic revenue, profitability and free cash flow generation in what is typically a small quarter from a financial perspective. The recently acquired Cyber Security businesses are performing in line with management’s expectations, which is reassuring. Our forecasts are unchanged as is our DCF-base valuation of €27, representing 14% upside from the current share price.
Tinexta |
A reassuring start to FY21 |
Q121 results |
Professional services |
13 May 2021 |
Share price performance
Business description
Next events
Analysts
Tinexta is a research client of Edison Investment Research Limited |
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Tinexta’s Q121 results highlighted strong growth in organic revenue, profitability and free cash flow generation in what is typically a small quarter from a financial perspective. The recently acquired Cyber Security businesses are performing in line with management’s expectations, which is reassuring. Our forecasts are unchanged as is our DCF-base valuation of €27, representing 14% upside from the current share price.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/19 |
258.7 |
53.5 |
0.80 |
0.00 |
29.6 |
N/A |
12/20 |
269.0 |
58.6 |
0.85 |
0.26 |
27.8 |
1.1 |
12/21e |
370.2 |
73.5 |
1.11 |
0.33 |
21.3 |
1.4 |
12/22e |
411.7 |
86.9 |
1.31 |
0.40 |
18.0 |
1.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q121: Strong growth in revenue, profit and cash flow
Tinexta’s year-on-year growth in Q121 was revenue 51%, adjusted EBITDA 55% and adjusted net income 90%. Organic growth for revenue of 17.6% y-o-y and adjusted EBITDA of 33.5% is a strong start to the year, against a weak COVID-affected Q120 comparative, with respective organic declines of 8.4% and 29.6%. The two-year organic growth rate for revenue is c 4%. The organic revenue growth in Q121 is broad based (Digital Trust +19.4% y-o-y, Credit Information & Management +10.7%, Innovation & Marketing Services +23.5%). Digital Trust’s growth is notable given a two-year rate of c 11% against management’s guidance of c 7% for FY21, whereas two-year growth rates for the other units are modestly negative. Adjusted EBITDA margins increased in all ‘organic’ divisions, giving a total margin of 20.6% (Q120 20.0%) despite the margin dilution from Cyber Security, which is performing in line with management’s expectations. Free cash flow generation of €24.8m increased 30% y-o-y due to the higher profitability and the same absolute working capital inflow, despite Tinexta’s increased scale after M&A (Cyber Security). On a trailing 12-month basis, free cash flow of €71.3m has increased 62% since Q120. The closing net debt position of €187.0m (2.2x trailing 12-month EBITDA) versus €91.9m (FY20) reflects M&A (Cyber Security) and the free cash flow generation.
FY21: Management’s guidance reiterated
Management has reiterated recent financial guidance for FY21 for revenue of €370m (+38% y-o-y) and EBITDA of €96m (+23% y-o-y), given the first quarter is typically one of the smallest from a financial perspective and comparatives become less negative/more positive through the year. We leave our forecasts unchanged, in line with management’s guidance.
Valuation: DCF valuation of €27/share
The share price has recently retreated, with the general market weakness leading to a P/E multiple for FY21 of 21.3x, below its prior peak multiple. We believe Tinexta's better future growth profile and cash generation warrant a higher multiple than historically. Our DCF-based valuation remains €27 per share.
Exhibit 1: Financial summary
€m |
2016 |
2017 |
2018 |
2019 |
2020 |
2021e |
2022e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||||
Revenue |
|
|
146.9 |
174.8 |
238.7 |
258.7 |
269.0 |
370.2 |
411.7 |
Operating costs |
(135.9) |
(172.1) |
(181.9) |
(187.8) |
(274.0) |
(301.1) |
|||
EBITDA before non-recurring costs |
|
|
30.2 |
38.9 |
66.6 |
76.8 |
81.2 |
96.2 |
110.6 |
EBITDA |
|
|
29.3 |
40.6 |
66.0 |
71.3 |
77.9 |
96.2 |
110.6 |
Normalised operating profit |
|
|
23.5 |
29.9 |
54.3 |
59.0 |
62.2 |
75.5 |
88.9 |
Amortisation of acquired intangibles |
(5.1) |
(4.6) |
(5.8) |
(5.9) |
(6.0) |
(6.0) |
(6.0) |
||
Exceptionals |
(1.0) |
1.8 |
(0.6) |
(5.5) |
(3.3) |
0.0 |
0.0 |
||
Share-based payments |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
17.4 |
27.1 |
47.9 |
47.5 |
52.9 |
69.5 |
82.9 |
||
Net Interest |
(1.0) |
1.5 |
(2.5) |
(4.1) |
0.6 |
(2.0) |
(2.0) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.1 |
(1.1) |
(1.0) |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
22.5 |
30.7 |
51.8 |
53.5 |
58.6 |
73.5 |
86.9 |
Profit Before Tax (reported) |
|
|
16.4 |
28.6 |
45.5 |
42.2 |
52.5 |
67.5 |
80.9 |
Reported tax |
(4.8) |
(8.4) |
(12.6) |
(13.4) |
(14.6) |
(19.9) |
(23.9) |
||
Profit After Tax (norm) |
15.9 |
21.6 |
36.8 |
38.3 |
40.6 |
51.8 |
61.3 |
||
Profit After Tax (reported) |
11.6 |
20.2 |
32.9 |
28.8 |
37.9 |
47.6 |
57.0 |
||
Minority interests |
(0.1) |
(0.1) |
(0.6) |
(0.6) |
(0.6) |
(0.8) |
(1.0) |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
15.9 |
21.6 |
36.2 |
37.7 |
39.9 |
51.0 |
60.3 |
||
Net income (reported) |
11.6 |
20.1 |
32.4 |
28.2 |
37.3 |
46.8 |
56.1 |
||
Average number of shares outstanding (m) |
37.5 |
46.6 |
46.8 |
47.3 |
46.7 |
46.1 |
46.1 |
||
EPS - normalised (c) |
|
|
42.3 |
46.5 |
77.6 |
80.3 |
85.4 |
110.6 |
130.8 |
EPS - normalised fully diluted (€) |
|
|
0.42 |
0.46 |
0.77 |
0.80 |
0.85 |
1.11 |
1.31 |
EPS - basic reported (€) |
|
|
0.31 |
0.43 |
0.69 |
0.60 |
0.80 |
1.01 |
1.22 |
Dividend (€) |
0.09 |
0.14 |
0.23 |
0.00 |
0.26 |
0.33 |
0.40 |
||
Revenue growth (%) |
18.3 |
19.0 |
36.6 |
8.4 |
4.0 |
37.6 |
11.2 |
||
EBITDA Margin before non-recurring costs (%) |
20.6 |
22.2 |
27.9 |
29.7 |
30.2 |
26.0 |
26.9 |
||
Normalised Operating Margin |
16.0 |
17.1 |
22.8 |
22.8 |
23.1 |
20.4 |
21.6 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
216.4 |
275.8 |
307.1 |
316.7 |
325.8 |
436.0 |
436.3 |
Intangible Assets |
200.7 |
260.6 |
272.1 |
269.9 |
285.1 |
398.3 |
400.5 |
||
Tangible Assets |
7.1 |
8.3 |
8.2 |
21.2 |
19.0 |
16.0 |
14.1 |
||
Investments & other |
8.6 |
6.9 |
26.8 |
25.6 |
21.7 |
21.7 |
21.7 |
||
Current Assets |
|
|
122.6 |
125.8 |
143.4 |
139.4 |
196.1 |
145.9 |
183.6 |
Stocks |
1.0 |
2.1 |
1.3 |
1.1 |
1.2 |
1.2 |
1.2 |
||
Debtors |
50.9 |
80.3 |
86.3 |
89.8 |
84.1 |
115.8 |
128.7 |
||
Cash & cash equivalents |
60.4 |
37.0 |
35.1 |
33.6 |
92.8 |
10.9 |
35.7 |
||
Other financial assets |
6.4 |
4.3 |
8.2 |
6.6 |
7.3 |
7.3 |
7.3 |
||
Other |
3.9 |
2.2 |
12.4 |
8.2 |
10.7 |
10.7 |
10.7 |
||
Current Liabilities |
|
|
(89.8) |
(102.9) |
(194.4) |
(160.4) |
(154.9) |
(177.6) |
(186.9) |
Creditors |
(33.2) |
(47.7) |
(93.9) |
(92.7) |
(106.7) |
(129.3) |
(138.6) |
||
Tax and social security |
(1.5) |
(6.1) |
(0.7) |
(2.9) |
(5.1) |
(5.1) |
(5.1) |
||
Short term borrowings |
(36.9) |
(21.7) |
(97.4) |
(62.0) |
(40.4) |
(40.4) |
(40.4) |
||
Other |
(18.2) |
(27.3) |
(2.4) |
(2.9) |
(2.7) |
(2.7) |
(2.7) |
||
Long Term Liabilities |
|
|
(119.2) |
(155.5) |
(110.8) |
(146.2) |
(193.2) |
(203.2) |
(198.2) |
Long term borrowings |
(100.8) |
(123.8) |
(70.7) |
(107.0) |
(150.5) |
(160.5) |
(155.5) |
||
Other long term liabilities |
(10.2) |
(17.5) |
(18.2) |
(15.8) |
(14.3) |
(14.3) |
(14.3) |
||
Net Assets |
|
|
129.9 |
143.2 |
145.4 |
149.4 |
173.9 |
201.2 |
234.9 |
Minority interests |
(0.2) |
(0.5) |
(3.8) |
(3.9) |
(4.0) |
(4.8) |
(5.8) |
||
Shareholders' equity |
|
|
129.7 |
142.7 |
141.6 |
145.6 |
169.8 |
196.4 |
229.1 |
CASH FLOW |
|||||||||
Operating cash flow |
|
|
20.0 |
32.2 |
43.4 |
55.2 |
81.6 |
61.3 |
77.1 |
Capex and intangibles |
(5.7) |
(6.5) |
(13.1) |
(13.5) |
(14.9) |
(18.0) |
(21.9) |
||
Acquisitions/disposals |
(37.0) |
(61.1) |
(33.2) |
(47.5) |
(36.1) |
(113.0) |
0.0 |
||
Net interest |
(1.0) |
(1.5) |
(1.4) |
(2.5) |
(1.9) |
(2.0) |
(2.0) |
||
Equity financing |
48.2 |
1.1 |
1.1 |
1.1 |
(10.0) |
(8.0) |
(8.0) |
||
Dividends |
(3.8) |
(7.0) |
(12.1) |
(16.4) |
(2.2) |
(12.2) |
(15.3) |
||
Borrowings |
19.4 |
15.2 |
17.3 |
23.7 |
35.4 |
10.0 |
(5.0) |
||
Other |
1.1 |
4.2 |
(3.9) |
(1.7) |
7.3 |
0.0 |
0.0 |
||
Net Cash Flow |
41.1 |
(23.4) |
(1.9) |
(1.5) |
59.2 |
(81.9) |
24.8 |
||
Opening net debt/(cash) |
|
|
48.5 |
71.2 |
104.4 |
124.9 |
129.1 |
91.9 |
182.5 |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
(63.8) |
(9.7) |
(18.7) |
(2.7) |
(22.0) |
(8.8) |
5.0 |
||
Closing net debt/(cash) |
|
|
71.2 |
104.4 |
124.9 |
129.1 |
91.9 |
182.5 |
152.7 |
Source: Company accounts, Edison Investment Research
|
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