Last close As at 05/08/2026
CAD50.97
▲ −0.03 (−0.06%)
Market capitalisation
CAD956m
Research: Industrials
Information Services Corporation’s (ISC’s) strong track record of acquiring and innovating registries, and related information services, was highlighted by yesterday’s five-year contract win with the Bank of Canada. This awards ISC with the role of operator and technology solutions provider for the Bank Act Security Registry, a clear testament to the company’s expertise. The operation is expected to commence in the summer of 2024, utilising ISC’s RegSys platform. We estimate that revenue for this contract, akin to the company’s other contracts, will amount to c C$5–15m over the five-year period. We maintain our forecasts and valuation of C$37 per share, implying a 74% upside.
Written by
Information Services Corporation |
Gaining momentum with new contract win |
Contract progress |
Industrial support services |
5 December 2023 |
Share price performance
Business description
Next event
Analysts
Information Services Corporation is a research client of Edison Investment Research Limited |
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Information Services Corporation’s (ISC’s) strong track record of acquiring and innovating registries, and related information services, was highlighted by yesterday’s five-year contract win with the Bank of Canada. This awards ISC with the role of operator and technology solutions provider for the Bank Act Security Registry, a clear testament to the company’s expertise. The operation is expected to commence in the summer of 2024, utilising ISC’s RegSys platform. We estimate that revenue for this contract, akin to the company’s other contracts, will amount to c C$5–15m over the five-year period. We maintain our forecasts and valuation of C$37 per share, implying a 74% upside.
Year |
Revenue |
EBITDA |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/20 |
169.4 |
67.8 |
51.4 |
2.25 |
0.83 |
9.5 |
3.9 |
12/21 |
189.9 |
64.4 |
46.5 |
1.95 |
0.92 |
10.9 |
4.3 |
12/22e |
210.1 |
75.0 |
45.8 |
1.92 |
0.92 |
11.1 |
4.3 |
12/23e |
230.2 |
89.8 |
50.9 |
2.12 |
0.92 |
10.1 |
4.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Five-year contract secured with Bank of Canada
ISC has secured a significant win as the operator and technology solutions provider for the Bank Act Security Registry by the Bank of Canada over a five-year term. This expands Registry Operations into a new services domain, while the Technology Solutions division, using RegSys, will develop and implement the technology for this registry. This operation, expected to commence mid-2024, will enable security interests to be registered under section 427 of the Bank Act across Canada with round-the-clock service provision. We expect that revenue will be c C$5–15m over the contract’s life, like ISC’s other contracts. This closely aligns with recent contract advancements involving RegSys, such as that with the State of Michigan, and marks a substantial step forward for ISC within the Canadian registries landscape, amplifying its service offerings and technological prowess.
Maintained 2023e and 2024e forecasts
We expect revenue to grow by 10.7% y-o-y in 2023 and 9.6% y-o-y in 2024, largely attributable to the Saskatchewan registries extension alongside a full-year contribution from last year’s acquisitions; our adjusted EBITDA forecasts imply year-on-year growth of 16.4% to C$75.0m in 2023 and 19.8% to C$89.8m in 2024. Although our forecasted 2023 basic EPS remains broadly flat at C$1.9, attributable to a substantial increase in net finance costs alongside a surge in amortisation from the extension, we expect incremental growth from the Master Service Agreement (MSA) extension to come through in 2024, with an EPS forecast of C$2.1.
Valuation: C$37 per share implies substantial upside
We maintain our forecasts and DCF valuation of C$37 per share, implying a 74% upside to the current share price. The stock trades at 10.1x FY24e P/E, representing a material discount, not only to its own history but also to a selection of peers, despite its long-term, predictable cash flows bolstered by the MSA extension.
Exhibit 1: Financial summary
C$m |
2019 |
2020 |
2021 |
2022 |
2023e |
2024e |
2025e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||||
Revenue |
|
|
133.0 |
136.7 |
169.4 |
189.9 |
210.1 |
230.2 |
240.5 |
Cost of Sales |
31.2 |
31.3 |
40.4 |
49.2 |
56.6 |
62.3 |
65.4 |
||
Gross Profit |
101.8 |
105.5 |
129.0 |
140.7 |
153.5 |
168.0 |
175.2 |
||
EBITDA |
|
|
40.0 |
49.2 |
67.8 |
64.4 |
75.0 |
89.8 |
92.8 |
Normalised operating profit |
|
|
28.6 |
36.5 |
54.0 |
49.7 |
54.6 |
63.7 |
66.0 |
Amortisation of acquired intangibles |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
(0.2) |
(2.6) |
(1.2) |
(2.0) |
(2.5) |
(2.0) |
(2.0) |
||
Share-based payments |
(0.4) |
(3.0) |
(6.0) |
(1.5) |
(2.0) |
(2.0) |
(2.0) |
||
Impairment |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
(0.5) |
(0.2) |
(0.1) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
27.6 |
30.7 |
46.8 |
46.2 |
50.1 |
59.7 |
62.0 |
||
Net Interest |
(1.2) |
(2.0) |
(2.7) |
(3.2) |
(8.8) |
(12.8) |
(11.8) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
27.4 |
34.4 |
51.4 |
46.5 |
45.8 |
50.9 |
54.2 |
Profit Before Tax (reported) |
|
|
26.4 |
28.6 |
44.1 |
43.0 |
41.3 |
46.9 |
50.3 |
Reported tax |
(7.0) |
(7.8) |
(12.0) |
(12.2) |
(11.8) |
(13.4) |
(14.3) |
||
Profit After Tax (norm) |
20.4 |
26.6 |
39.4 |
34.2 |
34.0 |
37.5 |
39.9 |
||
Profit After Tax (reported) |
19.4 |
20.8 |
32.1 |
30.8 |
29.5 |
33.6 |
35.9 |
||
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Discontinued operations |
(0.5) |
0.7 |
(1.0) |
(0.0) |
(0.0) |
(0.0) |
(0.0) |
||
Net income (normalised) |
20.4 |
26.6 |
39.4 |
34.2 |
34.0 |
37.5 |
39.9 |
||
Net income (reported) |
19.4 |
20.8 |
32.1 |
30.8 |
29.5 |
33.6 |
35.9 |
||
Average Number of Shares Outstanding (m) |
18 |
18 |
18 |
18 |
18 |
18 |
18 |
||
EPS - basic normalised (C$) |
|
|
1.167 |
1.520 |
2.249 |
1.946 |
1.922 |
2.121 |
2.255 |
EPS - normalised fully diluted (C$) |
|
|
1.17 |
1.51 |
2.18 |
1.91 |
1.89 |
2.09 |
2.22 |
EPS - basic reported (C$) |
|
|
1.11 |
1.19 |
1.83 |
1.75 |
1.67 |
1.90 |
2.03 |
DPS (C$) |
0.80 |
0.80 |
0.83 |
0.92 |
0.92 |
0.92 |
0.92 |
||
Revenue growth (%) |
- |
2.8 |
23.9 |
12.1 |
10.7 |
9.6 |
4.5 |
||
Gross Margin (%) |
76.6 |
77.1 |
76.2 |
74.1 |
73.1 |
73.0 |
72.8 |
||
EBITDA Margin (%) |
30.1 |
36.0 |
40.0 |
33.9 |
35.7 |
39.0 |
38.6 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
128.4 |
186.0 |
176.1 |
226.2 |
358.6 |
365.4 |
371.5 |
Intangible Assets |
40.0 |
70.0 |
61.1 |
89.0 |
222.3 |
230.0 |
237.0 |
||
Tangible Assets |
3.0 |
2.2 |
1.4 |
1.8 |
0.9 |
(0.0) |
(0.9) |
||
Investments & other |
85.4 |
113.9 |
113.6 |
135.4 |
135.4 |
135.4 |
135.4 |
||
Current Assets |
|
|
42.3 |
55.4 |
56.4 |
57.2 |
59.1 |
63.0 |
63.9 |
Stocks |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Debtors |
12.6 |
17.0 |
12.8 |
14.9 |
16.8 |
20.7 |
21.6 |
||
Cash & cash equivalents |
23.7 |
33.9 |
40.1 |
34.5 |
34.5 |
34.5 |
34.5 |
||
Other |
6.0 |
4.4 |
3.6 |
7.8 |
7.8 |
7.8 |
7.8 |
||
Current Liabilities |
|
|
24.7 |
27.3 |
36.9 |
39.6 |
43.6 |
49.5 |
51.5 |
Creditors |
18.1 |
21.9 |
26.5 |
33.9 |
37.8 |
43.7 |
45.7 |
||
Tax and social security |
0.8 |
1.2 |
7.0 |
0.7 |
0.7 |
0.7 |
0.7 |
||
Short term borrowings |
2.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
3.7 |
4.2 |
3.4 |
5.0 |
5.0 |
5.0 |
5.0 |
||
Long Term Liabilities |
|
|
32.7 |
93.0 |
57.9 |
88.2 |
205.2 |
192.6 |
178.0 |
Long term borrowings |
16.0 |
76.3 |
41.0 |
66.0 |
183.0 |
170.4 |
155.8 |
||
Other long term liabilities |
16.7 |
16.6 |
16.9 |
22.2 |
22.2 |
22.2 |
22.2 |
||
Net Assets |
|
|
113.4 |
121.1 |
137.7 |
155.6 |
168.9 |
186.3 |
206.1 |
Minority interests |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Shareholders' equity |
|
|
113.4 |
121.1 |
137.7 |
155.6 |
168.9 |
186.3 |
206.1 |
CASH FLOW |
|||||||||
Op Cash Flow before WC and tax |
40.0 |
49.2 |
67.8 |
64.4 |
75.0 |
89.8 |
92.8 |
||
Working capital |
(9.2) |
3.5 |
14.2 |
(3.8) |
2.1 |
2.0 |
1.0 |
||
Exceptional & other |
(0.5) |
(5.6) |
(7.2) |
(3.5) |
(4.5) |
(4.0) |
(4.0) |
||
Tax |
(7.0) |
(7.8) |
(12.0) |
(12.2) |
(11.8) |
(13.4) |
(14.3) |
||
Other |
0.3 |
1.6 |
(1.6) |
(1.3) |
(1.0) |
(1.0) |
(1.0) |
||
Net operating cash flow |
|
|
23.6 |
41.0 |
61.2 |
43.5 |
59.8 |
73.4 |
74.5 |
Capex |
(2.8) |
(1.2) |
(2.2) |
(1.5) |
(1.6) |
(1.7) |
(1.8) |
||
Acquisitions/disposals |
(6.8) |
(70.2) |
1.7 |
(54.7) |
(150.0) |
(30.0) |
(30.0) |
||
Net interest |
(1.0) |
(1.6) |
(2.8) |
(2.8) |
(6.9) |
(10.9) |
(9.9) |
||
Equity financing |
(1.8) |
(1.9) |
(2.0) |
(2.1) |
(2.1) |
(2.1) |
(2.1) |
||
Dividends |
(14.0) |
(14.0) |
(14.0) |
(16.2) |
(16.2) |
(16.2) |
(16.2) |
||
Other |
0.0 |
0.0 |
(0.4) |
3.4 |
0.1 |
0.1 |
0.1 |
||
Net Cash Flow |
(2.8) |
(47.9) |
41.6 |
(30.3) |
(117.0) |
12.6 |
14.7 |
||
Opening net debt/(cash) |
|
|
(8.7) |
(5.7) |
42.4 |
0.9 |
31.6 |
148.6 |
136.0 |
FX |
(0.2) |
(0.2) |
(0.4) |
0.2 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
0.0 |
0.0 |
0.3 |
(0.6) |
0.0 |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
(5.7) |
42.4 |
0.9 |
31.6 |
148.6 |
136.0 |
121.3 |
Source: Edison Investment Research
|
|
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