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Currency in EUR
Last close As at 30/03/2023
EUR1.90
▲ 0.02 (1.06%)
Market capitalisation
EUR88m
Research: TMT
Claranova has agreed to buy out a proportion of the 7.7% minority interest held in its PlanetArt subsidiary. The buy-out will be conducted in stages, with an initial purchase of 25% of the stake by March and up to a further 40% acquired over four six-monthly periods (linked to divisional EBITDA), reducing the minority interest stake to at least 2.7% for a cost of up to $38m/€33.5m. This follows the recent acquisition of the Avanquest minority interest and further simplifies the corporate structure.
Claranova |
Increasing stake in PlanetArt |
Minority interest acquisition |
Software & comp services |
17 January 2022 |
Share price performance
Business description
Next events
Analyst
ClaranovaClaranova is a research client of Edison Investment Research Limited |
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Claranova has agreed to buy out a proportion of the 7.7% minority interest held in its PlanetArt subsidiary. The buy-out will be conducted in stages, with an initial purchase of 25% of the stake by March and up to a further 40% acquired over four six-monthly periods (linked to divisional EBITDA), reducing the minority interest stake to at least 2.7% for a cost of up to $38m/€33.5m. This follows the recent acquisition of the Avanquest minority interest and further simplifies the corporate structure.
Year end |
Revenue (€m) |
EBITDA* |
PBT** |
Diluted EPS** |
DPS |
P/E |
06/20 |
409.1 |
17.4 |
11.3 |
0.20 |
0.0 |
30.8 |
06/21 |
471.9 |
34.2 |
25.5 |
0.40 |
0.0 |
15.4 |
06/22e |
506.1 |
39.0 |
31.3 |
0.49 |
0.0 |
12.6 |
06/23e |
561.1 |
46.4 |
37.6 |
0.63 |
0.0 |
9.8 |
Note: *Pre-IFRS 16. **PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Increasing ownership of PlanetArt
In 2017, Société Commune Européenne de Participation (part of the Riccobono printing group), invested $14m to buy a 7.7% stake in the PlanetArt business. This was structured as 671 preference shares (‘units’). Claranova has agreed to buy back up to 438 of these units at $85,840 each, equating to up to 65% of the minority interest. It will make the first payment by March, paying $14m for 168 units (25% of the minority interest). It will then acquire units to the value of 30% of PlanetArt EBITDA for H222, H123, H223 and H124. The company estimates this will cost up to $38m/€33.5m in total.
Earnings enhancing
Factoring in this agreement, our normalised EPS forecast increases by 0.3% in FY22 and 1.7% in FY23, assuming the minority interest has reduced to 4.4% by the end of FY23. We forecast net cash decreasing from €0.9m to net debt of €12.0m by the end of FY22 and net cash reducing from €35.6m to €13.9m by the end of FY23. Following the purchase of the Avanquest minority interest in November 2021, Claranova is simplifying its corporate structure, which should make it more attractive to investors and reduce obstacles to any possible spin-outs.
Valuation: Deal indicates higher PlanetArt valuation
Reflecting the different business models for each division, we continue to use a sum-of-the-parts approach to valuation. Using EV/sales multiples that reflect our views on divisional growth and profitability and are conservative compared to the peer group averages, we maintain our valuation of €10.46 per share. We note that the deal above values PlanetArt at $748m/€662m (1.6x FY22e revenue, 24x EBITDA), substantially higher than the valuation we use in our sum-of-parts calculation (0.9x and 14x respectively). Using this valuation would imply a per-share value of €16.19; a sustained resumption of growth in PlanetArt from Q222 will be the key trigger to drive the valuation of Claranova towards this level.
Changes to forecasts
Exhibit 1: Forecast changes
€m |
FY22e |
FY22e |
FY23e |
FY23e |
|||||
Old |
New |
Change |
y-o-y |
Old |
New |
Change |
y-o-y |
||
Revenues |
506.1 |
506.1 |
0.0% |
7.2% |
561.1 |
561.1 |
0.0% |
10.9% |
|
EBITDA |
42.6 |
42.6 |
0.0% |
12.7% |
50.0 |
50.0 |
0.0% |
17.3% |
|
EBITDA margin |
8.4% |
8.4% |
0.0% |
0.4% |
8.9% |
8.9% |
0.0% |
0.5% |
|
EBITDA - pre IFRS 16 |
39.0 |
39.0 |
0.0% |
14.1% |
46.4 |
46.4 |
0.0% |
18.9% |
|
EBITDA margin - pre IFRS 16 |
7.7% |
7.7% |
0.0% |
0.5% |
8.3% |
8.3% |
0.0% |
0.6% |
|
Normalised operating profit |
37.1 |
37.1 |
0.0% |
14.9% |
44.6 |
44.6 |
0.0% |
20.1% |
|
Normalised operating profit margin |
7.3% |
7.3% |
0.0% |
0.5% |
7.9% |
7.9% |
0.0% |
0.6% |
|
Reported operating profit |
34.0 |
34.0 |
0.0% |
37.1% |
41.5 |
41.5 |
0.0% |
22.0% |
|
Reported operating margin |
6.7% |
6.7% |
0.0% |
1.5% |
7.4% |
7.4% |
0.0% |
0.7% |
|
Normalised PBT |
31.3 |
31.3 |
0.0% |
22.9% |
37.6 |
37.6 |
0.0% |
20.0% |
|
Reported PBT |
28.2 |
28.2 |
0.0% |
56.8% |
34.5 |
34.5 |
0.0% |
22.2% |
|
Normalised net income |
22.4 |
22.5 |
0.3% |
41.8% |
28.5 |
29.0 |
1.7% |
29.0% |
|
Reported net income |
20.0 |
20.1 |
0.4% |
92.8% |
26.1 |
26.6 |
1.8% |
32.5% |
|
Normalised basic EPS (€) |
0.50 |
0.50 |
0.3% |
24.1% |
0.62 |
0.63 |
1.7% |
26.8% |
|
Normalised diluted EPS (€) |
0.49 |
0.49 |
0.3% |
24.3% |
0.62 |
0.63 |
1.7% |
26.8% |
|
Reported basic EPS (€) |
0.44 |
0.45 |
0.4% |
68.7% |
0.57 |
0.58 |
1.8% |
30.2% |
|
Net debt/(cash) |
(0.9) |
12.0 |
N/A |
N/A |
(35.6) |
(13.9) |
(60.8%) |
N/A |
|
Divisional revenues |
|||||||||
PlanetArt |
401.4 |
401.4 |
0.0% |
5.5% |
441.9 |
441.9 |
0.0% |
10.1% |
|
Avanquest |
100.8 |
100.8 |
0.0% |
14.9% |
115.2 |
115.2 |
0.0% |
14.3% |
|
myDevices |
3.9 |
3.9 |
0.0% |
1.8% |
4.0 |
4.0 |
0.0% |
2.0% |
|
Total |
506.1 |
506.1 |
0.0% |
7.2% |
561.1 |
561.1 |
0.0% |
10.9% |
|
Divisional EBITDA |
|||||||||
PlanetArt |
27.2 |
27.2 |
0.0% |
4.6% |
31.1 |
31.1 |
0.0% |
14.3% |
|
Avanquest |
15.1 |
15.1 |
0.0% |
38.5% |
18.5 |
18.5 |
0.0% |
22.5% |
|
myDevices |
(3.3) |
(3.3) |
0.0% |
21.5% |
(3.2) |
(3.2) |
0.0% |
(2.4%) |
|
Total EBITDA - pre IFRS 16 |
39.0 |
39.0 |
0.0% |
14.1% |
46.4 |
46.4 |
0.0% |
18.9% |
Source: Edison Investment Research
Exhibit 2: Financial summary
€'m |
2017 |
2018 |
2019 |
2020 |
2021 |
2022e |
2023e |
||
30-June |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||||
Revenue |
|
|
130.2 |
161.5 |
262.3 |
409.1 |
471.9 |
506.1 |
561.1 |
EBITDA |
|
|
(5.0) |
3.9 |
16.0 |
20.6 |
37.8 |
42.6 |
50.0 |
Company adjusted EBITDA |
|
|
(5.0) |
3.9 |
16.0 |
17.4 |
34.2 |
39.0 |
46.4 |
Normalised operating profit |
|
|
(5.8) |
3.4 |
15.5 |
15.8 |
32.3 |
37.1 |
44.6 |
Amortisation of acquired intangibles |
0.0 |
0.0 |
(1.5) |
(2.4) |
(3.1) |
(3.1) |
(3.1) |
||
Exceptionals |
0.4 |
(2.4) |
(2.9) |
(5.6) |
(4.4) |
0.0 |
0.0 |
||
Share-based payments |
(4.8) |
(7.1) |
0.3 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
(10.1) |
(6.1) |
11.4 |
7.8 |
24.8 |
34.0 |
41.5 |
||
Net Interest |
(0.9) |
(0.3) |
(3.5) |
(4.5) |
(6.8) |
(5.8) |
(7.0) |
||
Joint ventures & associates (post tax) |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
(45.6) |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
(6.6) |
3.1 |
12.0 |
11.3 |
25.5 |
31.3 |
37.6 |
Profit Before Tax (reported) |
|
|
(11.0) |
(6.4) |
(37.7) |
3.3 |
18.0 |
28.2 |
34.5 |
Reported tax |
(0.4) |
(1.8) |
(3.7) |
(2.1) |
(3.8) |
(6.5) |
(7.9) |
||
Profit After Tax (norm) |
(7.0) |
2.4 |
9.2 |
8.7 |
19.6 |
24.1 |
29.0 |
||
Profit After Tax (reported) |
(11.4) |
(8.2) |
(41.4) |
1.2 |
14.2 |
21.7 |
26.6 |
||
Minority interests |
0.3 |
0.2 |
0.6 |
(0.7) |
(3.8) |
(1.7) |
0.0 |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
(6.7) |
2.6 |
9.8 |
8.0 |
15.8 |
22.5 |
29.0 |
||
Net income (reported) |
(11.0) |
(7.9) |
(40.8) |
0.5 |
10.4 |
20.1 |
26.6 |
||
Basic ave. number of shares outstanding (m) |
38 |
39 |
39 |
39 |
39 |
45 |
46 |
||
EPS - basic normalised (€) |
|
|
(0.18) |
0.07 |
0.25 |
0.20 |
0.40 |
0.50 |
0.63 |
EPS - diluted normalised (€) |
|
|
(0.18) |
0.06 |
0.25 |
0.20 |
0.40 |
0.49 |
0.63 |
EPS - basic reported (€) |
|
|
(0.29) |
(0.20) |
(1.04) |
0.01 |
0.26 |
0.45 |
0.58 |
Dividend (€) |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
0.00 |
||
Revenue growth (%) |
10.9 |
24.0 |
62.4 |
56.0 |
15.4 |
7.2 |
10.9 |
||
EBITDA Margin (%) |
-3.8 |
2.4 |
6.1 |
5.0 |
8.0 |
8.4 |
8.9 |
||
Company adjusted EBITDA margin (%) |
-3.8 |
2.4 |
6.1 |
4.3 |
7.2 |
7.7 |
8.3 |
||
Normalised Operating Margin |
-4.4 |
2.1 |
5.9 |
3.9 |
6.8 |
7.3 |
7.9 |
||
BALANCE SHEET |
|||||||||
Fixed Assets |
|
|
2.0 |
1.3 |
75.1 |
93.7 |
96.4 |
191.0 |
187.1 |
Intangible Assets |
0.9 |
0.5 |
69.9 |
70.5 |
77.5 |
172.9 |
169.8 |
||
Tangible Assets |
0.3 |
0.2 |
1.4 |
15.7 |
12.2 |
11.4 |
10.6 |
||
Investments & other |
0.7 |
0.6 |
3.8 |
7.5 |
6.7 |
6.7 |
6.7 |
||
Current Assets |
|
|
28.1 |
79.1 |
100.9 |
116.3 |
128.4 |
166.6 |
195.4 |
Stocks |
3.7 |
3.7 |
4.8 |
14.4 |
16.1 |
17.3 |
19.1 |
||
Debtors |
4.3 |
4.9 |
11.6 |
9.9 |
9.2 |
9.9 |
10.9 |
||
Cash & cash equivalents |
17.1 |
65.7 |
75.4 |
82.8 |
90.4 |
126.7 |
152.6 |
||
Other |
2.9 |
4.8 |
9.1 |
9.2 |
12.7 |
12.7 |
12.7 |
||
Current Liabilities |
|
|
(28.1) |
(37.2) |
(60.5) |
(74.6) |
(75.4) |
(83.3) |
(90.5) |
Creditors |
(26.6) |
(35.4) |
(54.8) |
(64.3) |
(62.5) |
(70.4) |
(77.6) |
||
Tax and social security |
(0.3) |
(1.7) |
(3.0) |
(1.2) |
(2.0) |
(2.0) |
(2.0) |
||
Short term borrowings |
(1.1) |
(0.1) |
(2.7) |
(6.1) |
(7.7) |
(7.7) |
(7.7) |
||
Other |
0.0 |
0.0 |
0.0 |
(3.0) |
(3.2) |
(3.2) |
(3.2) |
||
Long Term Liabilities |
|
|
(0.7) |
(29.0) |
(52.0) |
(73.1) |
(66.3) |
(139.9) |
(139.9) |
Long term borrowings |
0.0 |
(28.1) |
(49.1) |
(62.8) |
(57.4) |
(131.0) |
(131.0) |
||
Other long-term liabilities |
(0.7) |
(0.9) |
(2.9) |
(10.3) |
(8.9) |
(8.9) |
(8.9) |
||
Net Assets |
|
|
1.3 |
14.2 |
63.6 |
62.3 |
83.1 |
134.4 |
152.2 |
Minority interests |
(0.1) |
(1.8) |
(11.0) |
(11.7) |
(16.2) |
(3.8) |
5.0 |
||
Shareholders' equity |
|
|
1.2 |
12.5 |
52.6 |
50.6 |
66.9 |
130.6 |
157.2 |
CASH FLOW |
|||||||||
Op Cash Flow before WC and tax |
(5.0) |
3.9 |
16.0 |
20.6 |
37.8 |
42.6 |
50.0 |
||
Working capital |
6.8 |
7.9 |
(4.1) |
22.5 |
(4.4) |
6.0 |
4.2 |
||
Exceptional & other |
(2.2) |
(5.7) |
(5.2) |
(6.3) |
(8.9) |
0.0 |
0.0 |
||
Tax |
(0.0) |
(1.2) |
(3.8) |
(6.8) |
(5.1) |
(6.5) |
(7.9) |
||
Net operating cash flow |
|
|
(0.4) |
5.0 |
3.0 |
30.0 |
19.4 |
42.2 |
46.3 |
Capex |
(0.2) |
(0.1) |
(2.5) |
(1.2) |
(3.8) |
(1.0) |
(1.0) |
||
Acquisitions/disposals |
3.6 |
14.2 |
(13.3) |
(31.9) |
(3.8) |
(60.5) |
(8.8) |
||
Net interest |
(0.0) |
(0.3) |
0.0 |
(0.5) |
(0.7) |
(5.8) |
(7.0) |
||
Equity financing |
1.9 |
2.0 |
(1.4) |
0.0 |
2.4 |
15.0 |
0.0 |
||
Dividends |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other |
0.1 |
(0.6) |
0.0 |
0.4 |
(2.6) |
(3.6) |
(3.6) |
||
Net Cash Flow |
5.0 |
20.1 |
(14.2) |
(3.2) |
11.1 |
(13.7) |
25.9 |
||
Opening net debt/(cash) |
|
|
(9.8) |
(16.0) |
(37.5) |
(23.6) |
(13.9) |
(25.3) |
12.0 |
FX |
(0.6) |
0.4 |
0.3 |
(0.8) |
1.8 |
0.0 |
0.0 |
||
Other non-cash movements |
1.8 |
1.1 |
0.0 |
(5.7) |
(1.4) |
(23.6) |
0.0 |
||
Closing net debt/(cash) |
|
|
(16.0) |
(37.5) |
(23.6) |
(13.9) |
(25.3) |
12.0 |
(13.9) |
Source: Claranova, Edison Investment Research
|
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LungLife AI is a medical diagnostics company focused on the development of AI-supported blood-based tests for the early detection of lung cancer. It has identified a significant medical need for non-invasive, sensitive and specific tests in early-stage lung cancer. The company’s core technology, the LungLB test, seeks to detect circulating tumour cells (CTCs) to identify malignant lung nodules. It aims to apply machine learning/AI (ML/AI) to derive algorithms to increase test accuracy. Following a 2021 pilot study showing 76% sensitivity and 71% specificity, LungLife AI is currently planning a large-scale validation study, with the aim of commercialising in 2023.
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