Last close As at 05/08/2026
EUR15.00
— 0.00 (0.00%)
Market capitalisation
EUR709m
Research: TMT
Tinexta’s revenue and adjusted EBITDA year-on-year growth slowed a little in Q223 after a strong start to the year, but there was improving momentum in revenue and profitability from the two divisions that are forecast to generate the fastest growth in FY23. Of most significance was the acceleration by the Cyber Security (CS) division, which appears to have turned a corner since the start of the year following relatively disappointing growth post the acquisitions. The low net debt position leaves the company well placed to take advantage of M&A opportunities. The shares remain at a significant discount to our unchanged DCF-based valuation of €30.4 per share.
Tinexta |
Mixed performance in Q223 |
H123 results |
Professional services |
3 August 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 revenue and adjusted EBITDA year-on-year growth slowed a little in Q223 after a strong start to the year, but there was improving momentum in revenue and profitability from the two divisions that are forecast to generate the fastest growth in FY23. Of most significance was the acceleration by the Cyber Security (CS) division, which appears to have turned a corner since the start of the year following relatively disappointing growth post the acquisitions. The low net debt position leaves the company well placed to take advantage of M&A opportunities. The shares remain at a significant discount to our unchanged DCF-based valuation of €30.4 per share.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
301.5 |
57.5 |
0.83 |
0.30 |
21.6 |
1.7 |
12/22 |
357.2 |
73.6 |
1.07 |
0.51 |
16.8 |
2.8 |
12/23e |
410.4 |
80.8 |
1.05 |
0.48 |
17.0 |
2.7 |
12/24e |
456.7 |
95.0 |
1.20 |
0.26 |
14.9 |
1.5 |
12/25e |
501.5 |
110.6 |
1.44 |
0.34 |
12.5 |
1.9 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Growth where it counts at this stage of the year
Tinexta’s revenue grew year-on-year by c 7% in Q223 to €96.4m, following 10% growth in Q123. There was a sequential, ie quarter-on-quarter, acceleration in growth by Digital Trust (DT) to 13.3% and CS to 16.6%. Within each division, the broad-based growth was encouraging. These were offset by Business Innovation’s (BI’s) 2% decline, including a number of positives and negatives by the individual business. The declines were either due to phasing and the expected reduction of government initiatives, with the former being resolved in H223, or some macro weakness. Adjusted EBITDA year-on-year growth of 2% to €23.0m (23.8% margin, Q222 25.1%) included operational leverage by DT and CS, offset by BI’s decline, Tinexta’s highest-margin division (35.5% in Q223), a function of mix changes and the lower revenue growth. A busy period for M&A, and most importantly, strong free cash generation led to lower net debt of c €53m by 30 June (c €78m end FY22).
FY23: Incorporating M&A on reiterated guidance
Management reiterated its FY23 guidance, emphasising a clear path to recovery for BI’s lower growth in Q2 and Tinexta’s typical high weighting to profit generation in Q4 of any year, with Q4 providing c 40% of annual EBITDA in FY21 and FY22. Our underlying assumptions are unchanged but we include new estimates for the July 2023 acquisition of the majority (65%) stake in Ascertia, which increases end FY23 net debt/EBITDA to 0.5x, in line with management’s underlying guidance of 0.2–0.3x.
Valuation: DCF-based valuation of €30.4 per share
The share price has been weak since the recent highs in February 2023, increasing the discount to our unchanged DCF-based valuation of €30.4 per share, which has been updated for the acquisition of Ascertia.
Exhibit 1: Financial summary
€m |
2021 |
2022 |
2023e |
2024e |
2025e |
||
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 |
119.8 |
136.7 |
EBITDA (not adjusted) |
|
|
71.3 |
86.3 |
94.1 |
109.8 |
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 |
(2.6) |
(6.4) |
(6.0) |
(5.0) |
(4.0) |
||
Share-based payments |
(2.6) |
(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) |
0.5 |
0.5 |
0.5 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
57.5 |
73.6 |
80.8 |
95.0 |
110.6 |
Profit Before Tax (reported) |
|
|
41.7 |
45.1 |
53.3 |
67.5 |
85.1 |
Reported tax |
(13.0) |
(12.5) |
(16.5) |
(20.3) |
(24.7) |
||
Profit After Tax (norm) |
40.3 |
52.4 |
55.7 |
66.5 |
78.5 |
||
Profit After Tax (reported) |
28.7 |
32.6 |
36.8 |
47.3 |
60.4 |
||
Minority interests |
(1.2) |
(2.4) |
(6.7) |
(10.8) |
(12.4) |
||
Discontinued operations |
10.0 |
45.5 |
37.6 |
0.0 |
0.0 |
||
Net income (normalised) |
39.1 |
50.0 |
49.0 |
55.7 |
66.2 |
||
Net income (reported) |
37.5 |
75.7 |
67.7 |
36.5 |
48.0 |
||
Average Number of Shares Outstanding (m) |
47.2 |
46.8 |
46.5 |
46.3 |
46.1 |
||
EPS - normalised (c) |
|
|
84.7 |
108.8 |
107.5 |
122.8 |
146.5 |
EPS - normalised fully diluted (c) |
|
|
82.8 |
106.7 |
105.4 |
120.3 |
143.6 |
EPS - basic reported (€) |
|
|
0.81 |
1.65 |
1.48 |
0.80 |
1.06 |
Dividend (c) |
30.00 |
51.00 |
48.04 |
26.00 |
34.42 |
||
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 |
629.9 |
617.8 |
605.6 |
Intangible Assets |
550.4 |
487.3 |
524.2 |
520.1 |
517.0 |
||
Tangible Assets |
25.2 |
48.4 |
42.4 |
34.4 |
25.4 |
||
Investments & other |
27.4 |
38.3 |
63.3 |
63.3 |
63.3 |
||
Current Assets |
|
|
213.2 |
403.5 |
432.0 |
466.3 |
521.2 |
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 |
140.8 |
158.3 |
197.5 |
||
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 |
478.0 |
488.3 |
519.5 |
Minority interests |
(46.9) |
(36.4) |
(67.0) |
(68.1) |
(69.3) |
||
Shareholders' equity |
|
|
203.9 |
365.7 |
411.0 |
420.2 |
450.2 |
CASH FLOW |
|||||||
Operating Cash Flow |
|
|
72.5 |
72.8 |
70.3 |
77.7 |
90.6 |
Capex and intangibles |
(16.2) |
(24.1) |
(23.0) |
(16.0) |
(17.0) |
||
Acquisitions/disposals |
(92.8) |
84.5 |
5.8 |
0.0 |
0.0 |
||
Net interest |
(2.3) |
(2.4) |
(2.8) |
(2.2) |
(1.2) |
||
Equity financing |
(9.3) |
(8.1) |
(3.0) |
(10.0) |
(10.0) |
||
Dividends |
(12.5) |
(20.8) |
(28.4) |
(32.0) |
(23.2) |
||
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 |
23.9 |
17.5 |
39.2 |
||
Opening net debt/(cash) |
|
|
91.9 |
264.4 |
77.6 |
53.6 |
36.1 |
Closing net debt/(cash) |
|
|
264.4 |
77.6 |
53.6 |
36.1 |
(3.1) |
Source: Tinexta accounts, Edison Investment Research
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Research: Investment Companies
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