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Tinexta’s FY22 results demonstrated strong growth but were just shy of our expectations, mainly due to lower growth than expected from the Cyber Security (CS) division. Management’s new guidance suggests greater profit growth in FY23 than was delivered in FY22, before any contributions from recently announced and likely further mergers and acquisitions (M&A) are considered. The growth plan continues to focus on strengthening Tinexta’s position in its reference markets, M&A, internationalisation of the divisions and cross-selling opportunities. We downgrade our FY23 and FY24 EBITDA estimates by 7–8% to reflect the new guidance. Our DCF-based valuation of €29.5/share (€38.7 previously) suggests the company’s share price is attractively valued.
Tinexta |
Management anticipates stronger growth in FY23 |
FY22 results |
Professional services |
20 March 2023 |
Share price performance
Business description
Next events
Analysts
Tinexta is a research client of Edison Investment Research Limited |
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Tinexta’s FY22 results demonstrated strong growth but were just shy of our expectations, mainly due to lower growth than expected from the Cyber Security (CS) division. Management’s new guidance suggests greater profit growth in FY23 than was delivered in FY22, before any contributions from recently announced and likely further mergers and acquisitions (M&A) are considered. The growth plan continues to focus on strengthening Tinexta’s position in its reference markets, M&A, internationalisation of the divisions and cross-selling opportunities. We downgrade our FY23 and FY24 EBITDA estimates by 7–8% to reflect the new guidance. Our DCF-based valuation of €29.5/share (€38.7 previously) suggests the company’s share price is attractively valued.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21** |
301.5 |
57.8 |
0.83 |
0.30 |
24.3 |
1.5 |
12/22 |
357.2 |
71.0 |
1.07 |
0.51 |
18.7 |
2.5 |
12/23e |
410.4 |
80.0 |
1.04 |
0.46 |
19.4 |
2.3 |
12/24e |
456.7 |
94.2 |
1.19 |
0.26 |
16.9 |
1.3 |
12/25e |
501.5 |
109.8 |
1.42 |
0.34 |
14.2 |
1.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. **Restated for disposal.
FY22: Cyber Security dampened group growth
Tinexta’s year-on-year revenue and adjusted EBITDA growth of 18% to €357m and 24% to €95m, respectively, included organic growth of 6% and 5%, respectively. The results were 2–3% below our expectations and management’s updated guidance, primarily due to lower growth than expected from CS. FY22 was a significant year with a dramatic reshaping of the group towards a focus on its highest-growth divisions, and the receipt of investment from external parties to help drive future growth. By the year-end, the net debt position had improved significantly to €78m (0.8x adjusted EBITDA), from €264m at end FY21, providing significant potential for further M&A.
FY23–25: Higher growth with margin leverage
Management is more optimistic about Tinexta’s growth prospects in FY23, with guidance of organic growth in revenue of 11–15% and adjusted EBITDA of 8–12%, and double-digit growth rates expected in FY23–25. The guidance includes an anticipated strong recovery for CS, which we believe is in ‘show me’ mode for investors given its performance since acquisition. We downgrade our FY23 and FY24 EBITDA estimates by 7-8% to reflect the new guidance and introduce estimates for FY25. In addition to the enhanced profit growth prospects, shareholders will be rewarded with an enhanced dividend payout ratio in outer years of the three-year plan of 35% of net profit versus 30% in FY23.
Valuation: DCF highlights attractive valuation
The wider market weakness has brought Tinexta’s valuation to attractive levels relative to our DCF-based valuation, which has reduced to €29.5/share (€38.7 previously) to reflect our lower forecasts and a higher WACC due to changes in bond yields.
FY22 results: Cyber Security dampens growth
Income statement: Revenue and margin growth
Exhibit 1: Summary income statement
€m |
FY21 |
FY22 |
FY22e |
FY22 versus Edison |
Group revenue |
301.5 |
357.2 |
365.3 |
(2%) |
Growth y-o-y |
N/D |
18.4% |
21.1% |
|
Organic y-o-y |
N/D |
6.4% |
10.8% |
|
– Digital Trust |
131.3 |
157.0 |
158.5 |
(1%) |
Organic y-o-y |
11.0% |
9.5% |
10.0% |
|
– Cyber Security |
72.8 |
77.5 |
88.1 |
(12%) |
Organic y-o-y |
104.2% |
4.1% |
21.0% |
|
– Business Innovation |
98.3 |
125.7 |
120.5 |
4% |
Organic y-o-y |
11.3% |
6.0% |
10.0% |
|
– Other |
(0.9) |
(3.0) |
(1.8) |
63% |
Group adjusted EBITDA |
76.5 |
94.8 |
97.3 |
(3%) |
Margin |
25.4% |
26.5% |
26.6% |
|
Growth y-o-y |
N/D |
23.9% |
27.3% |
|
Organic y-o-y |
N/D |
4.8% |
17.0% |
|
– Digital Trust |
36.4 |
47.3 |
46.1 |
3% |
Margin |
27.7% |
30.1% |
29.1% |
|
– Cyber Security |
10.1 |
10.3 |
13.1 |
(21%) |
Margin |
13.9% |
13.3% |
14.9% |
|
– Business Innovation |
41.9 |
51.6 |
51.1 |
1% |
Margin |
42.6% |
41.1% |
42.4% |
|
– Other |
(11.9) |
(14.5) |
(13.0) |
12% |
Reported EBITDA |
71.3 |
86.3 |
90.5 |
(5%) |
Operating profit |
45.0 |
51.6 |
53.4 |
(3%) |
Margin |
14.9% |
14.5% |
14.6% |
|
Growth y-o-y |
14.7% |
18.7% |
||
Net finance |
(3.3) |
(6.5) |
(4.4) |
47% |
Reported PBT |
41.7 |
45.1 |
49.0 |
(8%) |
Tax |
(13.0) |
(12.5) |
(15.7) |
|
Tax rate |
31% |
28% |
32% |
|
Net profit from continuing operations |
28.7 |
32.6 |
33.3 |
(2%) |
Profit from discontinued operations |
10.0 |
45.5 |
||
Total net profit |
38.7 |
78.1 |
||
DPS (€) |
0.30 |
0.51 |
0.29 |
75% |
Source: Tinexta, Edison Investment Research
Tinexta’s FY22 revenue grew by c 18% y-o-y to €357.2m, adjusted EBITDA by c 24% to €94.8m and operating profit by c 15% to €51.6m. In addition to organic revenue growth of c 6% and adjusted EBITDA growth of c 5%, there was a significant contribution from M&A, adding 12% to revenue and 19% to EBITDA growth.
While the results represented strong growth for the year, they were shy of our estimates and management’s guidance. Revenue was 2% below our forecast of €365.3m and adjusted EBITDA was 3% below our estimated €97.3m, mainly due to underperformance by CS (see below).
At the start of FY22, management guided to organic revenue growth of 10–12%, total revenue growth of 18–20% and adjusted EBITDA growth of 20–22%. This included the expected results for the Credit Information & Management (CIM) division that was subsequently sold, and was before the outbreak of war in Ukraine and subsequent economic weakening, which is likely to have negatively affected results versus initial guidance. At the start of FY22, management estimated a three-year revenue CAGR (FY22–24) of 6% for CIM, therefore the disposal should have been accretive to Tinexta’s growth. At the H122 phase, following the announcement of CIM’s disposal, FY22 guidance was updated to organic revenue growth of 10–12%, total revenue growth of 21–23%, organic adjusted EBITDA growth of 8–10% and total adjusted EBITDA growth of 25–27%. On the publication of Tinexta’s Q322 results, the guidance focused on only total growth, which was reiterated.
The higher interest charge was solely attributable to a higher contingent consideration adjustment on acquisitions, while the underlying interest charge was consistent with the prior year.
Tinexta’s effective tax rate of 28% was lower than our forecast 32%, and the prior year’s 31%.
The capital gain on the sale of Innolva, part of CIM, of €45.5m enabled management to propose a significantly higher dividend for the year of €0.51 versus €0.30 in the prior year, a 70% increase. The capital gain relating to the sale of ReValuta, the remaining part of CIM, was realised on completion of the transaction on 7 March 2023 and will therefore benefit FY23 results.
Divisional performance
At the divisional level, the revenue of Business Innovation (BI) (previously named Innovation & Marketing Services) was 4% above our prior estimates, while Digital Trust (DT) was marginally (ie 1%) below our estimate, and CS was significantly lower, by 12%. From a profit perspective, the underperformance versus our expectations was driven by adjusted EBITDA for both DT and BI that was above our forecasts, while CS, the smallest and least profitable division, was 21% below our estimate, and central costs were higher.
The increase in Tinexta’s adjusted EBITDA margin to 26.5%, from 25.4% in the prior year, was broadly in line with our expected margin of 26.6%. However, the drivers were slightly different than we expected; DT exceeded our expectations while CS and BI were lower than we expected.
Exhibit 2: Business unit performance
€m |
Q122 |
Q222 |
Q322 |
Q422 |
FY22 |
Group revenue |
78.1 |
89.9 |
78.7 |
110.5 |
357.2 |
Growth y-o-y |
21.9% |
18.8% |
16.9% |
16.9% |
18.4% |
Organic y-o-y |
N/D |
6.2% |
3.1% |
6.4% |
6.4% |
– Digital Trust |
38.0 |
38.9 |
37.0 |
43.1 |
157.0 |
Organic y-o-y |
7.7% |
8.5% |
12.8% |
9.3% |
9.5% |
– Cyber Security |
18.0 |
18.8 |
18.0 |
22.8 |
77.5 |
Organic y-o-y |
7.1% |
5.4% |
1.9% |
2.4% |
4.1% |
– Business Innovation |
21.0 |
32.8 |
24.3 |
46.0 |
125.7 |
Organic y-o-y |
19.4% |
5.8% |
(7.4%) |
7.9% |
6.0% |
Group adjusted EBITDA |
14.5 |
22.6 |
17.7 |
40.0 |
94.8 |
Margin |
18.6% |
25.1% |
22.5% |
36.2% |
26.5% |
Growth y-o-y |
24.5% |
18.2% |
9.1% |
35.5% |
23.9% |
Organic y-o-y |
N/D |
0.1% |
(14.9%) |
19.3% |
4.8% |
– Digital Trust |
10.4 |
10.7 |
11.7 |
14.5 |
47.3 |
Margin |
27.3% |
27.6% |
31.6% |
33.7% |
30.1% |
Organic y-o-y |
19.4% |
12.1% |
14.5% |
12.7% |
14.3% |
– Cyber Security |
1.2 |
1.8 |
1.8 |
5.5 |
10.3 |
Margin |
6.5% |
9.8% |
9.8% |
24.3% |
13.3% |
Organic y-o-y |
(39.4%) |
18.8% |
(24.7%) |
29.9% |
2.3% |
– Business Innovation |
6.3 |
13.6 |
7.7 |
23.9 |
51.6 |
Margin |
30.2% |
41.5% |
31.8% |
52.0% |
41.1% |
Organic y-o-y |
14.2% |
(5.8%) |
(28.8%) |
41.4% |
2.0% |
– Other |
(3.4) |
(3.7) |
(3.5) |
(4.0) |
(14.5) |
Source: Tinexta
DT’s 9.5% organic revenue growth in FY22 was broadly in line with management’s guidance from the start of the year of 10%, and follows slightly stronger growth of 11% in the prior year, which was helped by an easier COVID-19 comparative. The November 2021 acquisition of CertEurope took total revenue growth for FY22 to 19.6%. DT’s growth was driven by further product enhancements and the addition of new customers, which boosted volumes. As is typical, the revenue growth fed through to higher growth in adjusted EBITDA, 14% organic and 30% total growth for the year, taking the FY22 margin to an all-time high of 30.1%. The higher margin reflects some benefit from CertEurope, which has a higher margin (we estimate at 41.9% in the first 12 months since being acquired) than the underlying business, which also enjoyed operating leverage with an increase in the margin to 28.7% from FY21’s 27.4%.
CS’s FY22 organic revenue growth of c 4% was significantly below management’s three-year (FY22–24) guidance from the start of 2022 of 19%. The acquisition of LAN & WAN contributed a further c 2% to growth. Management highlighted that demand was negatively affected by international geopolitics and inflationary issues, as well as the mix shifts highlighted through 2022. Through the first nine months of 2022, CS’s organic revenue growth was running at just over 5%, and management was confident that Q322’s delays to spend would reverse in Q422; however, the reversal was lower than expected, leading to a further increase in the revenue backlog, which should be supportive for growth in FY23. The lower-than-expected revenue growth, previously highlighted mix shifts and internal investment to build the organisational and commercial structure led to adjusted EBITDA growth of 2% being below management’s expectations. At the start of the year, management guided to a three-year CAGR for adjusted EBITDA of 31% for FY22–24. CS’s adjusted EBITDA margin declined from 13.9% in FY21 to 13.3% in FY22.
BI’s revenue enjoyed its typical Q4 strength with organic revenue growth of c 8%, taking the FY22 growth rate to 6%. Growth was driven by consulting services, while demand for subsidised instruments was negatively affected by the macroeconomic weakness. The acquisitions of Evalue (January 2022), Enhancers (April 2022), Plannet (July 2022) and Forvalue (July 2021) contributed a further c 22% revenue growth, taking total growth to 27.8%. BI’s FY22 adjusted EBITDA margin of 41.1% was marginally below FY21’s 42.6%, reflecting the contribution of the above acquisitions that have lower margins than the underlying businesses. Q422 was very strong from a profit perspective, with an adjusted EBITDA margin of 45% versus 21.4% in the prior year.
Balance sheet and cash flow
In absolute terms and relative to revenue, Tinexta’s FY22 free cash flow generation was lower than the prior year. Tinexta generated €49m of free cash flow in FY22 versus €56m in FY21. The main changes in FY22 from the prior year were a small working capital outflow in FY22 versus an inflow in the prior year; lower cash tax payment; higher combined spend on tangible and intangible assets of c €24m in FY22 versus FY21’s €16m; and €2m less cash generated by CIM.
At the period end, Tinexta’s cash position increased to c €117m from c €68m at the end of FY21. Beyond the free cash generation highlighted above, the most significant movements were acquisitions of €73m, disposals of €129m (Innolva, the CIM division) and internal investments by minorities of €70m (of the €100m expected from Bregal Milestone for an initial c 12% of InfoCert in the DT division) and €55m (from Intesa Sanpaolo for 12% of Warrant Hub in the BI division). The remaining €30m investment from Bregal Milestone was received by Tinexta at the start of February 2023, taking Bregal’s minority stake in InfoCert to 16%.
The above cash flow produced a significant improvement in Tinexta’s net debt position to c €78m at the period end, from €264m at the end of FY21. The slight delay in the receipt of proceeds for the sale of ReValuta (part of CIM) led to the period end net debt/adjusted EBITDA being 0.8x, versus management’s expectation of 0.6x at the Q322 stage.
New business plan and financial guidance
As is customary at the start of the year, management introduced guidance for FY23 and its new three-year business plan (ie for FY23–25).
The key pillars of the medium-term plan are consistent with prior years: strengthen leadership in reference markets; strengthen the integrated offer, selective M&A and internationalisation; enhance corporate culture including further focus on environmental, social and governance issues; and maintain a strong focus on the financials.
The financial guidance for the business units and Tinexta as a whole for FY23 and FY23–25 is as follows:
Exhibit 3: Management’s guidance for organic growth
Revenue FY23 |
Adjusted EBITDA FY23 |
Revenue FY23–25 CAGR |
Adjusted EBITDA FY23–25 CAGR |
|
Digital Trust |
10% |
11% |
10% |
14% |
Cyber Security |
30% |
43% |
17% |
27% |
Business Innovation |
15% |
5% |
13% |
11% |
Group |
11–15% |
8–12% |
Low/mid-double-digit |
Double-digit |
Source: Tinexta
The guidance does not include any contribution from the recently announced deals: 20% of Defence Tech Holding, which will be equity accounted; 65% of Ascertia; any future potential M&A; or any benefits from Italy’s EU-funded post-COVID National Recovery and Resilience Plan (Piano Nazionale di Ripresa e Resilienza).
Management is more optimistic about the outlook for FY23 than it delivered in FY22, with expected organic revenue growth of 11–15% versus FY22’s c 6%. The key deltas in management’s expectations for FY23 versus 2002 are a significant improvement for CS, with guided organic revenue growth of 30% versus the c 4% delivered in FY22, and BI, with guidance for 15% organic growth following FY22’s 6%. The guided 10% organic revenue growth for DT is consistent with results delivered over the long term.
From a profit perspective, higher margins are anticipated for DT and CS in FY23, but not for BI due to the mix effects of lower-margin acquisitions. In aggregate, these combine to produce expected organic adjusted EBITDA growth for the group of 8–12%, lower than the indicated revenue growth of 11–15%, in part due to the increased relative contribution of CS, which has a lower margin than the rest of the group. Within the guidance, management assumes inflation of 6%.
Moving to the medium-term business plan, the strong FY23 organic revenue growth rates for CS and BI are expected to moderate in the outer years (ie post FY23) to still-high three-year CAGRs for 2023–25 of 17% and 13% respectively, while DT’s growth rate is expected to be stable, and the same as last year’s FY22–24 guidance. There is greater optimism for BI’s growth prospects (13% CAGR) than at the start of 2022 (7% CAGR FY22–24), which is testimony to the accretive nature of its acquisitions and reflects the increasing benefits from Intesa Sanpaolo. Conversely, the lower FY23–25 guidance for CS’s organic revenue growth of 17% following its 4% delivered growth in FY22 indicates a reduction in management’s medium-term growth expectations versus this time last year, when a three-year (FY22–24) CAGR of 19% was anticipated. The new three-year 17% revenue CAGR implies low double-digit growth in FY24 and FY25 if CS achieves the 30% FY23 guidance.
As for FY23, management anticipates margin leverage for DT and CS in FY23–25, including accelerating growth for DT after FY23, but not for BI. In aggregate, double-digit profit growth is expected. The medium-term targets assume general inflation of 3% by the end of the plan.
Shareholder returns will improve with a projected greater dividend payout ratio of 35% of net profit by the end of the three years, from 30% in FY23.
In the absence of further M&A, management estimates the company will have net cash by the end of FY23 and FY25.
New forecasts
In the table below we show our new estimates for FY24 and introduce new estimates for FY25, which are in line with management’s guidance.
Exhibit 4: New FY23–25 estimates for Tinexta
€m |
FY22e |
FY22 |
FY23e new |
FY24e new |
FY25e new |
FY23e old |
FY24e old |
FY23e change % |
FY24e change % |
Group revenue |
365.3 |
357.2 |
410.4 |
456.7 |
501.5 |
408.2 |
455.8 |
1% |
0% |
Growth y-o-y |
21.1% |
18.4% |
14.9% |
11.3% |
9.8% |
11.7% |
11.7% |
||
Organic y-o-y |
10.8% |
6.4% |
14.9% |
11.3% |
9.8% |
||||
– Digital Trust |
158.5 |
157.0 |
172.7 |
189.9 |
208.9 |
173.6 |
191.2 |
(1%) |
(1%) |
Growth y-o-y |
20.7% |
19.5% |
10.0% |
10.0% |
10.0% |
10% |
10% |
||
Organic |
10.0% |
9.5% |
10.0% |
10.0% |
10.0% |
||||
– Cyber Security |
88.1 |
77.5 |
100.8 |
111.8 |
124.1 |
104.9 |
122.7 |
(4%) |
(9%) |
Growth y-o-y |
21.0% |
6.4% |
30.0% |
11.0% |
11.0% |
19% |
17% |
||
Organic |
21.0% |
4.1% |
30.0% |
11.0% |
11.0% |
||||
– Business Innovation |
120.5 |
125.7 |
144.5 |
163.3 |
181.3 |
132.5 |
145.1 |
9% |
13% |
Growth y-o-y |
22.5% |
27.8% |
15.0% |
13.0% |
11.0% |
10% |
9% |
||
Organic |
10.0% |
6.0% |
15.0% |
13.0% |
11.0% |
||||
– Intra-group |
(1.8) |
(3.0) |
(7.5) |
(8.4) |
(12.9) |
(2.9) |
(3.2) |
161% |
161% |
Group adjusted EBITDA |
97.3 |
94.8 |
104.1 |
119.7 |
136.7 |
113.2 |
128.6 |
(8%) |
(7%) |
Margin |
26.6% |
26.5% |
25.4% |
26.2% |
27.2% |
27.7% |
28.2% |
||
Growth y-o-y |
27.3% |
23.9% |
9.8% |
15.1% |
14.1% |
16.3% |
13.6% |
||
– Digital Trust |
46.1 |
47.3 |
52.5 |
60.4 |
70.0 |
52.1 |
59.2 |
1% |
2% |
Margin |
29.1% |
30.1% |
30.4% |
31.8% |
33.5% |
30.0% |
30.9% |
||
Growth y-o-y |
26.7% |
30.0% |
11.0% |
15.0% |
16.0% |
13.0% |
13.7% |
||
– Cyber Security |
13.1 |
10.3 |
14.7 |
18.4 |
21.2 |
18.4 |
22.6 |
(20%) |
(18%) |
Margin |
14.9% |
13.3% |
14.6% |
16.5% |
17.1% |
17.5% |
18.4% |
||
Growth y-o-y |
30.0% |
2.1% |
43.0% |
25.0% |
15.0% |
39.8% |
23.0% |
||
– Business Innovation |
51.1 |
51.6 |
54.2 |
61.8 |
70.5 |
57.4 |
62.9 |
(5%) |
(2%) |
Margin |
42.4% |
41.1% |
37.5% |
37.9% |
38.9% |
43.3% |
43.3% |
||
Growth y-o-y |
22.0% |
23.3% |
5.0% |
14.0% |
14.0% |
12.2% |
9.6% |
||
– Other |
(13.0) |
(14.5) |
(17.4) |
(20.9) |
(25.1) |
(14.6) |
(16.0) |
20% |
30% |
Growth y-o-y |
9.3% |
21.9% |
20.0% |
20.0% |
20.0% |
12.0% |
10.0% |
Source: Edison Investment Research
Our revenue estimates for FY23 and FY24 are broadly unchanged, with year-on-year growth of c 15% and c 11% respectively. The key features of the changes to forecasts are an upgrade for BI, offset by lower estimates for CS and higher intra-group eliminations.
Our adjusted EBITDA estimates for FY23 and FY24 are downgraded by 8% and 7%, respectively, giving year-on-year growth of c 10% and c 15%, respectively. The main divisional drivers of the downgrades are CS, BI and higher central costs/intra-group eliminations.
For FY25, we forecast revenue growth of c 10% and adjusted EBITDA growth of c 14% to give three-year CAGRs of 11% and 12%, respectively.
Valuation: Well supported by lowered DCF-based valuation
Our DCF-based valuation reduces to €29.5/share, from €38.7 previously, implying good upside from the current share price. The lower valuation reflects the above downgrade to our forecasts and a higher WACC of 8% (6.8% previously) that takes account of changes in interest rates (Italian 10year bond yield of 4.2%) and a higher company specific beta of 0.8x (source: Refinitiv).
In the charts below, we show Tinexta’s prospective EV/sales and EV/EBITDA multiples for FY23–25 versus its long-term high, average (quoted in charts) and low multiples.
|
Exhibit 5: Tinexta’s EV/sales multiple |
Exhibit 6: Tinexta’s EV/EBITDA multiple |
|
|
|
Source: Tinexta, Edison Investment Research, Refinitiv |
Source: Tinexta, Edison Investment Research, Refinitiv |
|
Exhibit 5: Tinexta’s EV/sales multiple |
|
|
Source: Tinexta, Edison Investment Research, Refinitiv |
|
Exhibit 6: Tinexta’s EV/EBITDA multiple |
|
|
Source: Tinexta, Edison Investment Research, Refinitiv |
The prospective EV/sales multiples for FY23–25 of 3.0x, 2.7x and 2.4x compare with its long-term average of 2.4x since 2014, but the long-term average is skewed by the lower valuations in Tinexta’s formative years when profitability was lower. The prospective EV/EBITDA multiples of 11.7x, 10.1x and 8.9x are more in line with the long-term average of 10.2x despite the improved profitability of the group.
Exhibit 7: Financial summary
€m |
2021R |
2022 |
2023e |
2024e |
2025e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
|||||||
Revenue |
|
|
301.5 |
357.2 |
410.4 |
456.7 |
501.5 |
Operating costs |
(225.1) |
(262.4) |
(306.4) |
(337.0) |
(364.8) |
||
EBITDA |
|
|
76.5 |
94.8 |
104.1 |
119.7 |
136.7 |
EBITDA (not adjusted) |
|
|
71.3 |
86.3 |
94.1 |
109.7 |
128.7 |
Operating profit (before amort. and excepts.) |
|
|
61.1 |
77.6 |
83.1 |
96.7 |
111.3 |
Amortisation of acquired intangibles |
(11.0) |
(17.5) |
(17.5) |
(17.5) |
(17.5) |
||
Exceptionals |
(2.3) |
(6.4) |
(6.0) |
(5.0) |
(4.0) |
||
Share-based payments |
(2.8) |
(2.1) |
(4.0) |
(5.0) |
(4.0) |
||
Reported operating profit |
45.0 |
51.6 |
55.6 |
69.2 |
85.8 |
||
Net Interest |
(3.1) |
(6.2) |
(2.8) |
(2.2) |
(1.2) |
||
Joint ventures & associates (post tax) |
(0.2) |
(0.2) |
(0.3) |
(0.3) |
(0.3) |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
57.8 |
71.0 |
80.0 |
94.2 |
109.8 |
Profit Before Tax (reported) |
|
|
41.7 |
45.1 |
52.5 |
66.7 |
84.3 |
Reported tax |
(13.0) |
(12.5) |
(16.3) |
(20.0) |
(24.4) |
||
Profit After Tax (norm) |
40.3 |
52.6 |
55.2 |
65.9 |
78.0 |
||
Profit After Tax (reported) |
28.7 |
32.6 |
36.3 |
46.7 |
59.8 |
||
Minority interests |
(1.2) |
(2.4) |
(6.7) |
(10.8) |
(12.4) |
||
Discontinued operations |
10.0 |
45.5 |
35.0 |
0.0 |
0.0 |
||
Net income (normalised) |
39.1 |
50.2 |
48.5 |
55.2 |
65.6 |
||
Net income (reported) |
37.5 |
75.7 |
64.5 |
35.9 |
47.5 |
||
Average Number of Shares Outstanding (m) |
47.2 |
46.7 |
46.7 |
46.5 |
46.2 |
||
EPS – normalised (c) |
|
|
84.7 |
109.4 |
105.7 |
120.9 |
144.5 |
EPS – normalised fully diluted (c) |
|
|
82.8 |
107.5 |
103.8 |
118.7 |
141.8 |
EPS – basic reported (€) |
|
|
0.81 |
1.65 |
1.41 |
0.79 |
1.05 |
Dividend (€) |
0.30 |
0.51 |
0.46 |
0.26 |
0.34 |
||
Revenue growth (%) |
12.1 |
18.4 |
14.9 |
11.3 |
9.8 |
||
EBITDA Margin before non-recurring costs (%) |
25.4 |
26.5 |
25.4 |
26.2 |
27.2 |
||
Normalised Operating Margin |
20.3 |
21.7 |
20.2 |
21.2 |
22.2 |
||
BALANCE SHEET |
|||||||
Fixed Assets |
|
|
602.9 |
574.0 |
558.5 |
534.0 |
508.1 |
Intangible Assets |
550.4 |
487.3 |
471.9 |
447.3 |
421.4 |
||
Tangible Assets |
25.2 |
48.4 |
48.4 |
48.4 |
48.4 |
||
Investments & other |
27.4 |
38.3 |
38.3 |
38.3 |
38.3 |
||
Current Assets |
|
|
213.2 |
403.5 |
496.9 |
544.1 |
612.3 |
Stocks |
1.3 |
1.9 |
1.9 |
1.9 |
1.9 |
||
Debtors |
119.5 |
129.5 |
143.4 |
160.2 |
175.9 |
||
Cash & cash equivalents |
68.3 |
115.3 |
205.6 |
236.0 |
288.6 |
||
Other financial assets |
4.1 |
125.8 |
125.8 |
125.8 |
125.8 |
||
Other |
20.0 |
31.0 |
20.2 |
20.2 |
20.2 |
||
Current Liabilities |
|
|
(207.5) |
(260.9) |
(269.3) |
(281.2) |
(292.7) |
Creditors |
(146.8) |
(156.4) |
(169.8) |
(181.7) |
(193.2) |
||
Tax and social security |
(3.6) |
(2.9) |
(2.9) |
(2.9) |
(2.9) |
||
Short term borrowings |
(54.1) |
(93.6) |
(93.6) |
(93.6) |
(93.6) |
||
Other |
(3.1) |
(8.0) |
(3.0) |
(3.0) |
(3.0) |
||
Long Term Liabilities |
|
|
(357.9) |
(314.6) |
(314.6) |
(314.6) |
(314.6) |
Long term borrowings |
(281.5) |
(235.2) |
(235.2) |
(235.2) |
(235.2) |
||
Other long term liabilities |
(35.0) |
(42.4) |
(42.4) |
(42.4) |
(42.4) |
||
Net Assets |
|
|
250.8 |
402.0 |
471.5 |
482.3 |
513.1 |
Minority interests |
(46.9) |
(36.4) |
(67.0) |
(68.1) |
(69.3) |
||
Shareholders' equity |
|
|
203.9 |
365.7 |
404.5 |
414.2 |
443.8 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
72.5 |
72.8 |
81.1 |
89.6 |
103.8 |
Capex and intangibles |
(16.2) |
(24.1) |
(23.0) |
(16.0) |
(17.0) |
||
Acquisitions/disposals |
(92.8) |
84.5 |
40.8 |
0.0 |
0.0 |
||
Net interest |
(2.3) |
(2.4) |
(2.8) |
(2.2) |
(1.2) |
||
Equity financing |
(9.3) |
(8.1) |
(10.0) |
(10.0) |
(10.0) |
||
Dividends |
(12.5) |
(20.8) |
(27.4) |
(31.0) |
(23.0) |
||
Borrowings |
42.9 |
(40.2) |
0.0 |
0.0 |
0.0 |
||
Other |
6.6 |
1.4 |
30.0 |
0.0 |
0.0 |
||
Net Cash Flow |
(24.6) |
48.6 |
88.7 |
30.4 |
52.5 |
||
Opening net debt/(cash) |
|
|
91.9 |
264.4 |
77.6 |
(11.3) |
(41.7) |
Closing net debt/(cash) |
|
|
264.4 |
77.6 |
(11.3) |
(41.7) |
(94.2) |
Source: Tinexta, Edison Investment Research
|
|
Research: Investment Companies
Witan Investment Trust (WTAN) employs a multi-manager approach to invest in global equities, including varied and interesting strategies that may normally be unavailable to individual investors. WTAN’s recently released results for the year ended December 2022 do not tell the whole story regarding the trust’s current performance, however, as they mask an improvement in relative returns following a difficult first quarter. This improvement gathered momentum in the second half of 2022 and accelerated in the first two months of this year. In the six months to end February 2023, the trust returned 3.7% in NAV terms and 4.8% on a share price basis, outpacing the benchmark return of 0.9% considerably. While it is early days still, this suggests the portfolio’s positioning in anticipation of improved economic and market conditions is beginning to pay off and should continue to reward investors as economic activity picks up over 2023 and beyond.
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