Osirium Technologies — New business recovering after weak Q2

Osirium Technologies (LN: OSI)

Last close As at 24/05/2024

8.00

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Market capitalisation

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Research: TMT

Osirium Technologies — New business recovering after weak Q2

After a strong order intake in Q1, potential customers delayed placing orders in Q2, resulting in a 25% bookings decline in H120. Revenue increased 36% y-o-y and tight cost control reduced the EBITDA loss over the same period. Osirium has adapted its marketing and customer support to remote working and bookings intake has picked up in Q3, with five new customers signed. We have revised our forecasts to reflect lower bookings in FY20 and FY21; the impact at the EBITDA level is mitigated by tight cost control

Katherine Thompson

Written by

Katherine Thompson

Director

TMT

Osirium Technologies

New business recovering after weak Q2

H120 results

Software & comp services

6 October 2020

Price

19.0p

Market cap

£4m

Net debt (£m) at end H120

0.3

Shares in issue

19.5m

Free float

91%

Code

OSI

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

(7.3)

(7.3)

(41.5)

Rel (local)

(9.3)

(4.9)

(30.9)

52-week high/low

39.0p

17.0p

Business description

UK-based Osirium Technologies designs and supplies subscription-based cybersecurity software. Its PAM platform includes privileged access, task, session and behaviour management. It recently launched a secure process automation solution (PPA) and a privileged endpoint management (PEM) solution.

Next events

FY20 trading update

January 2021

Analyst

Katherine Thompson

+44 (0)20 3077 5730

Osirium Technologies is a research client of Edison Investment Research Limited

After a strong order intake in Q1, potential customers delayed placing orders in Q2, resulting in a 25% bookings decline in H120. Revenue increased 36% y-o-y and tight cost control reduced the EBITDA loss over the same period. Osirium has adapted its marketing and customer support to remote working and bookings intake has picked up in Q3, with five new customers signed. We have revised our forecasts to reflect lower bookings in FY20 and FY21; the impact at the EBITDA level is mitigated by tight cost control.

Year end

Revenue (£m)

EBITDA*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

EV/Sales
(x)

12/18

0.96

(1.77)

(18.1)

0.0

N/A

2.3

12/19

1.17

(2.15)

(19.5)

0.0

N/A

1.9

12/20e

1.40

(1.94)

(16.0)

0.0

N/A

1.6

12/21e

1.68

(1.82)

(16.5)

0.0

N/A

1.3

Note: *EBITDA and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

COVID-19 effect felt from Q2

After a record Q1 for bookings, Osirium found it harder to sign new business in Q2 as COVID-19 restrictions were put in place and potential customers focused on immediate business continuity issues. Despite this, existing customers continued to renew contracts and expand their requirements. Bookings declined 25% y-o-y in H120 (we note H119 included a large three-year renewal), while revenue increased 36%. Operating costs were 6% lower y-o-y, resulting in an EBITDA loss of £0.9m compared to £1.2m for H119. Gross cash at the end of H120 stood at £2.13m before the receipt of a £0.56m R&D tax credit in July.

Improving trading in H2

Post period end, the company has signed several new contracts including police forces, a regional NHS supplier and a university in the UK, as well as the first ever contract in Indonesia and a contract with an IT solutions provider in the Middle East. The company has also expanded its network of resellers and technology partners. We have revised our bookings forecasts for FY20 and FY21, reflecting lower bookings intake in both years and reducing reported revenue forecasts in both years. We also reflect tighter control over costs, resulting in a small reduction in the EBITDA loss in FY20e.

Valuation: Bookings the key driver

Osirium is trading at a discount to peers on an EV/Sales basis. As it is an early-stage company several years from profitability, we have performed a reverse DCF to analyse the assumptions factored into the current share price, using a WACC of 10% and a terminal growth rate of 3%. We estimate that the current share price is discounting average bookings growth of 24% for FY22–29e, break-even EBITDA in FY25, average EBITDA margins of -4.2% for FY22–29e and a terminal EBITDA margin of 35.8%.

Review of H120 results

Exhibit 1: Half-yearly results highlights

£000s

H119

H120

y-o-y

Bookings

1,030.0

770.0

-25%

Deferred income

1,239.2

1,436.2

16%

SaaS revenues

427.8

555.6

30%

Services revenues

87.6

147.0

68%

Total revenues

515.5

702.6

36%

Operating expenses

(1,710.8)

(1,603.7)

-6%

EBITDA

(1,195.4)

(901.1)

-25%

Depreciation & amortisation

(514.3)

(667.6)

30%

Normalised/reported operating profit

(1,709.6)

(1,568.6)

-8%

Net interest income

(0.4)

(110.9)

31394%

Normalised/reported PBT

(1,710.0)

(1,679.5)

-2%

Tax

334.3

260.7

-22%

Reported net income

(1,375.7)

(1,418.9)

3%

EPS - basic & diluted (p)

(10)

(7)

-30%

Gross cash

889.6

2,128.3

139%

Net cash/(debt)

889.6

(321.5)

N/A

Source: Osirium

Osirium reported a 36% y-o-y increase in revenue in H120. Bookings slowed during Q2 due to COVID-19 restrictions such that deferred revenue only increased 16% y-o-y. Good control over operating costs (down 6% y-o-y) resulted in smaller EBITDA and operating losses compared to H119. The company has not furloughed any staff or received any other forms of government support, instead cutting salaries across the board by 80% to manage cash during the pandemic.

Net finance costs increased, reflecting the convertible bond issued in H219. Gross cash stood at £2.1m at the end of H120 (down from £3.9m at the end of FY19), and taking account of the £2.4m convertible, net debt was £0.3m at the end of H120. The company generated a £0.9m cash outflow from operations and spent a further £0.8m in capex, mainly capitalised development costs. Post period end, the company received an R&D tax credit of £0.56m.

Order intake slowed in Q2, picking up again in H2

Osirium saw strong order inflow in Q1, with orders ahead of management expectations until early April and five new customers signed up. In Q2, as COVID-19 restrictions took effect, order intake slowed significantly. Overall for H120, orders declined 25% y-o-y. In H119, the company signed a major three-year deal – stripping out orders from this customer in both periods, bookings were comfortably ahead y-o-y.

Although new business was tougher to sign as prospective customers deferred IT project-related decisions in favour of immediate business continuity, the company notes that all contracts coming up for renewal in H120 were renewed and the majority of existing customers booked more this year than last.

Since the end of H1, the company has signed new contracts with several customers in the UK, including a group of major police forces, a regional NHS provider and a university. The company signed its first contract in Indonesia, with an IT and services consultancy provider, and also signed up an IT solutions provider in the Middle East.

Adapting marketing and support to remote working

Osirium quickly responded to COVID-19 restrictions with all staff working from home and a temporary freeze on recruitment. The restrictions have meant that the company has had to rethink events, one of its major marketing tools, and shift lead generation online. During H1, it launched the Osirium Customer Network, a forum for existing customers to meet and share best practices and their experiences using Osirium’s technology. The company has also hosted online workshops on PAM-related topics, with the first events at full capacity.

Expanding partnerships

The company accelerated efforts to expand its reseller network, adding 13 new partners in H120. The network now covers Benelux, the Nordics, South-Eastern Europe and the Middle East. Post period end, the company signed technology partnerships with AppViewX (cybersecurity and network management), RSA (cybersecurity and digital risk management) and My1Login (identity and access management).

Product updates

Osirium launched new releases of all three products during H1 and also launched PPA Express, a free version of Privileged Process Automation (PPA), as a marketing tool.

Outlook and changes to forecasts

Although management expects an uptick in new business wins in H2 and better revenue growth in FY21, it notes that FY20 revenue may be lower than current market estimates. We have reduced our bookings forecasts for FY20 and FY21, reflecting the delays in decision making while COVID-19 restrictions are in place. This results in a reduction in our reported revenue forecasts for both years. At the same time, we have reduced our operating cost forecasts, reflecting salary reductions this year as well as lower spend on travel and events. Overall, this reduces our EBITDA loss forecast in FY20 and slightly increases it in FY21. We continue to expect that the company will need to seek more funding in FY21 and provisionally model this as an increase in debt.

Exhibit 2: Changes to forecasts

£000s

FY20e

FY21e

Old

New

Change

y-o-y

Old

New

Change

y-o-y

Bookings

2,179.0

1,507.1

(30.8%)

-17.0%

2,941.6

2,034.6

(30.8%)

35.0%

Revenues

1,521.5

1,399.2

(8.0%)

19.4%

2,096.2

1,676.2

(20.0%)

19.8%

EBITDA

(2,222.8)

(1,914.0)

(13.9%)

(11.1%)

(1,783.9)

(1,824.3)

2.3%

(4.7%)

EBITDA margin

-146.1%

-136.8%

(6.4%)

-85.1%

-108.8%

27.9%

Normalised operating profit

(3,775.1)

(3,459.2)

(8.4%)

1.8%

(3,540.4)

(3,588.3)

1.4%

3.7%

Normalised operating margin

-248.1%

-247.2%

0.9%

-168.9%

-214.1%

(45.2%)

Reported operating profit

(3,775.1)

(3,459.2)

(8.4%)

1.8%

(3,540.4)

(3,588.3)

1.4%

3.7%

Reported operating margin

-248.1%

-247.2%

0.9%

-168.9%

-214.1%

(45.2%)

Normalised PBT

(3,979.7)

(3,663.8)

(7.9%)

6.1%

(3,745.0)

(3,792.9)

1.3%

3.5%

Reported PBT

(3,979.7)

(3,663.8)

(7.9%)

6.1%

(3,745.0)

(3,792.9)

1.3%

3.5%

Normalised net income

(3,382.7)

(3,114.2)

(7.9%)

10.1%

(3,183.3)

(3,224.0)

1.3%

3.5%

Reported net income

(3,382.7)

(3,114.2)

(7.9%)

10.1%

(3,183.3)

(3,224.0)

1.3%

3.5%

Normalised basic EPS (p)

(17.35)

(15.97)

(7.9%)

(17.9%)

(16.33)

(16.54)

1.3%

3.5%

Normalised diluted EPS (p)

(17.35)

(15.97)

(7.9%)

(17.9%)

(16.33)

(16.54)

1.3%

3.5%

Reported basic EPS (p)

(17.35)

(15.97)

(7.9%)

(17.9%)

(16.33)

(16.54)

1.3%

3.5%

Gross cash

930.7

650.7

(30.1%)

901.3

697.0

(22.7%)

Net debt/(cash)

1,617.2

1,897.2

17.3%

N/A

4,349.1

5,053.5

16.2%

166.4%

Source: Edison Investment Research


Exhibit 3: Financial summary

£'000s

2013

2014

2015

2016

2017

2018

2019

2020e

2021e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

120.0

207.0

290.2

477.6

647.6

957.5

1,171.6

1,399.2

1,676.2

EBITDA

 

 

(366.7)

(327.1)

(377.9)

(1,136.7)

(1,609.4)

(1,767.3)

(2,152.1)

(1,914.0)

(1,824.3)

Normalised operating profit

 

 

(679.4)

(714.3)

(790.7)

(1,725.6)

(2,296.8)

(2,674.8)

(3,399.7)

(3,459.2)

(3,588.3)

Amortisation of acquired intangibles

0.0

0.0

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

0.0

0.0

Share-based payments

0.0

(184.3)

(56.4)

(96.9)

0.0

0.0

0.0

0.0

0.0

Reported operating profit

(679.4)

(898.5)

(847.1)

(1,822.5)

(2,296.8)

(2,674.8)

(3,399.7)

(3,459.2)

(3,588.3)

Net Interest

(35.2)

5.7

(9.9)

9.7

4.2

(0.6)

(52.2)

(204.6)

(204.6)

Joint ventures & associates (post tax)

0.0

0.0

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

0.0

0.0

Profit Before Tax (norm)

 

 

(714.6)

(708.5)

(800.7)

(1,715.9)

(2,292.6)

(2,675.4)

(3,451.9)

(3,663.8)

(3,792.9)

Profit Before Tax (reported)

 

 

(714.6)

(892.8)

(857.1)

(1,812.8)

(2,292.6)

(2,675.4)

(3,451.9)

(3,663.8)

(3,792.9)

Reported tax

137.7

134.1

121.0

453.3

409.4

407.6

622.5

549.6

568.9

Profit After Tax (norm)

(576.9)

(602.1)

(687.6)

(1,286.9)

(1,883.2)

(2,267.8)

(2,829.4)

(3,114.2)

(3,224.0)

Profit After Tax (reported)

(576.9)

(758.7)

(736.0)

(1,359.6)

(1,883.2)

(2,267.8)

(2,829.4)

(3,114.2)

(3,224.0)

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

(576.9)

(602.1)

(687.6)

(1,286.9)

(1,883.2)

(2,267.8)

(2,829.4)

(3,114.2)

(3,224.0)

Net income (reported)

(576.9)

(758.7)

(736.0)

(1,359.6)

(1,883.2)

(2,267.8)

(2,829.4)

(3,114.2)

(3,224.0)

Basic ave. number of shares outstanding (m)

0

1

10

10

10

13

15

19

19

EPS - normalised (p)

 

 

N/A

N/A

(6.61)

(12.38)

(18.12)

(18.14)

(19.45)

(15.97)

(16.54)

EPS - normalised fully diluted (p)

 

 

N/A

N/A

(6.61)

(12.38)

(18.12)

(18.14)

(19.45)

(15.97)

(16.54)

EPS - basic reported (p)

 

 

(296.36)

(144.92)

(7.08)

(13.08)

(18.12)

(18.14)

(19.45)

(15.97)

(16.54)

Dividend (p)

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Revenue growth (%)

26.3

72.6

40.2

64.6

35.6

47.9

22.4

19.4

19.8

EBITDA Margin (%)

-305.7

-158.0

-130.2

-238.0

-248.5

-184.6

-183.7

-136.8

-108.8

Normalised Operating Margin

-566.3

-345.0

-272.5

-361.3

-354.7

-279.4

-290.2

-247.2

-214.1

BALANCE SHEET

Fixed Assets

 

 

815.7

805.2

799.7

1,178.8

1,812.1

2,360.2

3,124.4

3,440.8

3,629.8

Intangible Assets

808.6

795.7

793.3

1,134.5

1,731.9

2,307.2

2,936.5

3,321.3

3,578.7

Tangible Assets

7.2

9.5

6.4

44.3

80.2

52.9

187.9

119.5

51.0

Investments & other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Current Assets

 

 

109.3

269.2

428.1

3,953.7

1,646.4

3,134.6

4,837.3

1,707.5

1,852.4

Stocks

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Debtors

77.2

218.6

154.6

380.9

622.6

748.0

982.4

1,056.8

1,155.5

Cash & cash equivalents

32.2

50.6

273.5

3,572.8

1,023.8

2,386.6

3,854.9

650.7

697.0

Other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Current Liabilities

 

 

(235.2)

(294.2)

(365.0)

(648.5)

(857.7)

(1,170.3)

(1,923.0)

(2,055.3)

(2,444.5)

Creditors

(235.2)

(294.2)

(365.0)

(648.5)

(857.7)

(1,170.3)

(1,889.1)

(2,021.4)

(2,410.6)

Tax and social security

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Short term borrowings

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.0

0.0

0.0

0.0

0.0

0.0

(33.9)

(33.9)

(33.9)

Long Term Liabilities

 

 

(952.5)

(487.6)

(163.3)

0.0

0.0

0.0

(2,422.4)

(2,591.0)

(5,759.5)

Long term borrowings

(789.0)

(323.7)

0.0

0.0

0.0

0.0

(2,345.4)

(2,547.9)

(5,750.4)

Other long term liabilities

(163.4)

(163.9)

(163.3)

0.0

0.0

0.0

(77.0)

(43.1)

(9.1)

Net Assets

 

 

(262.6)

292.6

699.5

4,483.9

2,600.8

4,324.5

3,616.3

502.0

(2,721.9)

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

 

 

(262.6)

292.6

699.5

4,483.9

2,600.8

4,324.5

3,616.3

502.0

(2,721.9)

CASH FLOW

Op Cash Flow before WC and tax

(366.7)

(327.1)

(377.9)

(1,136.7)

(1,609.4)

(1,767.3)

(2,152.1)

(1,914.0)

(1,824.3)

Working capital

66.3

3.8

120.7

226.8

85.5

187.2

633.7

57.8

290.6

Exceptional & other

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Tax

109.8

48.4

134.6

120.4

291.4

407.6

473.3

549.6

568.9

Net operating cash flow

 

 

(190.6)

(274.9)

(122.6)

(789.4)

(1,232.5)

(1,172.5)

(1,045.1)

(1,306.6)

(964.8)

Capex

(412.8)

(376.7)

(407.3)

(968.0)

(1,320.6)

(1,455.7)

(1,852.8)

(1,861.6)

(1,952.9)

Acquisitions/disposals

0.0

0.0

0.0

0.0

0.0

0.0

0.4

0.0

0.0

Net interest

(35.2)

5.7

(9.9)

9.7

4.2

(0.6)

0.0

0.0

0.0

Equity financing

0.0

639.3

762.8

5,047.1

0.0

3,991.5

1,726.4

0.0

0.0

Dividends

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

0.0

0.0

0.0

0.0

0.0

0.0

(60.6)

(36.0)

(36.0)

Net Cash Flow

(638.6)

(6.5)

222.9

3,299.3

(2,549.0)

1,362.8

(1,231.7)

(3,204.2)

(2,953.7)

Opening net (cash)/debt

 

 

118.3

756.9

273.1

(273.5)

(3,572.8)

(1,023.8)

(2,386.6)

(1,509.5)

1,897.2

FX

0.0

0.0

0.0

0.0

0.0

0.0

(0.0)

(0.0)

0.0

Other non-cash movements

0.0

490.3

323.8

0.0

0.0

(0.0)

354.6

(202.5)

(202.5)

Closing net (cash)/debt

 

 

756.9

273.1

(273.5)

(3,572.8)

(1,023.8)

(2,386.6)

(1,509.5)

1,897.2

5,053.5

Source: Osirium, Edison Investment Research


General disclaimer and copyright

This report has been commissioned by Osirium Technologies and prepared and issued by Edison, in consideration of a fee payable by Osirium Technologies. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Osirium Technologies and prepared and issued by Edison, in consideration of a fee payable by Osirium Technologies. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2020 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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