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Last close As at 09/06/2023
ZAR38.45
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ZAR8,648m
Research: TMT
FY22 was a year of robust global demand for technology solutions, with supply chain issues and semiconductor shortages constraining Datatec’s ability to meet that demand, leading to a growing backlog of pending orders. Datatec’s three divisions all had a strong year, which would have been even stronger for Westcon and Logicalis if orders could have been fully met. We note management’s cautious tone on H123 in particular, although we believe Datatec remains a defensive player in an uncertain world (strong dollar, price and wage inflation, the war in Ukraine, lockdowns). Off the back of FY22, we have raised our revenue estimates, but remain cautious on margins. Datatec still trades on only c 3.5x FY23 EV/adjusted EBITDA, which we believe understates the group’s prospects and recent performance. As a result of the strategic review, management is in negotiations on the potential sale of Analysys Mason.
Datatec |
Potential strategic sale of Analysys Mason |
FY22 results update |
IT services |
13 June 2022 |
Share price performance
Business description
Next events
Analysts
|
FY22 was a year of robust global demand for technology solutions, with supply chain issues and semiconductor shortages constraining Datatec’s ability to meet that demand, leading to a growing backlog of pending orders. Datatec’s three divisions all had a strong year, which would have been even stronger for Westcon and Logicalis if orders could have been fully met. We note management’s cautious tone on H123 in particular, although we believe Datatec remains a defensive player in an uncertain world (strong dollar, price and wage inflation, the war in Ukraine, lockdowns). Off the back of FY22, we have raised our revenue estimates, but remain cautious on margins. Datatec still trades on only c 3.5x FY23 EV/adjusted EBITDA, which we believe understates the group’s prospects and recent performance. As a result of the strategic review, management is in negotiations on the potential sale of Analysys Mason.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
02/21 |
4,109 |
73.1 |
13.6 |
6.6 |
18.0 |
2.7 |
02/22 |
4,637 |
85.0 |
18.7 |
39.3 |
13.0 |
16.1 |
02/23e |
4,919 |
95.9 |
19.6 |
6.5 |
12.5 |
2.7 |
02/24e |
5,117 |
107.3 |
25.2 |
8.4 |
9.7 |
3.4 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
FY22 results: A solid platform for growth
FY22 reported revenue was $4.64bn, up 13%, with adjusted EBITDA rising by 36% to $177m, a 3.8% margin (FY21: 3.2%). Highlighting the operational gearing of the business, underlying EPS rose 38% to 18.7 US cents per share versus our forecast FY22 EPS of 17.0 US cents. As a result, the group declared a dividend of ZAR1.11 (FY21: ZAR1.00) in addition to a special dividend, taking the total dividend paid for the year to c 39 US cents per share. Net debt at 28 February 2022 rose to $130m (FY21: $61m), below our FY22 forecast of $166m, with strong cash generation and effective receivables collection partly mitigating the build-up of inventory.
Revenues nudged upwards, caution on margins
We have made some changes to our FY23 and FY24 estimates following Datatec’s FY22 results, increasing net revenue growth in FY23 to 6%, slowing to 4% in FY24. Given wide economic uncertainties, adjusted EBITDA margins in FY23 and FY24 fall slightly to 3.9% (FY22: 3.8%). With the anticipated growth of Westcon, coupled with historically high inventory levels and backlog in FY23, we assume FY23 net debt rises to $154m and stays at a similar level in FY24 of $161m.
Valuation: Defensive growth with strategic upside
All three of Datatec’s divisions now have a solid track record of profitability. Despite this, Datatec’s shares trade on only 3.5x FY23e EV/adjusted EBITDA and 12.5x P/E, with a 2.7% prospective dividend yield. There is also a prospect of tangible upside from the strategic review, with a potential sale of Analysys Mason the most likely outcome. As we have stated before, we believe that Datatec’s valuation is backward looking and does not reflect the positive transformation of the business and its improved operational performance.
FY22 results: A resilient performance
Datatec delivered a strong operational performance across all divisions in FY22, with group revenues rising 13% to $4.6bn and adjusted EBITDA (excluding share-based payments and restructuring costs) rising 36% y-o-y to $177m. The FY22 adjusted EBITDA margin was 3.8% (FY21: 3.2%). Exchange rates were less of an issue in FY22 as they have been in recent years, with group revenue growth of 11.8% in constant currency terms.
The FY22 results include a share-based payment charge of $22.5m, double the equivalent charge in FY21 ($11.5m), reflecting the increasing valuations of the divisions’ cash-settled share-based payment plans, particularly for Westcon and Analysys Mason.
The group reported PBT of $51m (FY21: $25m) and paid $11m in tax (FY21: $20m), an effective tax rate of 21% (FY21: 77%), benefiting from UK tax losses. At 28 February 2022, estimated tax loss carry forwards amounted to $231m, a future tax benefit of c $57m, of which $36m has been recognised as a deferred tax asset.
Highlighting the operational gearing of the business, underlying EPS rose 38% to 18.7 US cents per share versus our forecast FY22 EPS of 17.0 US cents. As a result, based on the group’s policy of 3x dividend cover, the board declared a dividend of ZAR1.11 (FY21: ZAR1.00) (a 3.1% dividend yield), in addition to the $70m special dividend paid in November 2021, taking the total dividend paid for the year to $85m in aggregate, or c 39 US cents per share.
Net debt at 28 February 2022 rose to $130m (FY21: $61m), lower than our FY22 forecast of $166m, with net debt typically increasing as the business grows, but with strong cash generation partly mitigating the build-up of inventory. Excluding lease liabilities, net debt was $36m (FY21: net cash of $53m).
Record backlog equates to around three months of group sales
For the first time, management provided an analysis of group backlog, highlighting its material growth over the past 12 months as supply chain delays slowed product delivery for both Logicalis and Westcon. Open orders at the end of FY22 were approximately $1.2bn, compared with c $0.5bn for FY21, itself a record level of backlog.
Exhibit 1: Significant year-on-year growth in group backlog |
Source: Datatec accounts |
Given the ongoing supply chain issues and the uncertain macroeconomic environment, we do not expect this backlog to unwind in H123, but we do anticipate that it will start to slowly unwind in H223 and in FY24 as the supply-side squeeze steadily eases. These unfulfilled sales orders will then be recognised as additional sales, supplementing and supporting Datatec’s growth in H223 and FY24. Total backlog at FY22 year-end equated to approximately three months of group sales.
Exhibit 2: Logicalis backlog build-up most acute in the Americas |
Exhibit 3: Westcon backlog is hardware centric |
Source: Datatec |
Source: Datatec |
Exhibit 2: Logicalis backlog build-up most acute in the Americas |
Source: Datatec |
Exhibit 3: Westcon backlog is hardware centric |
Source: Datatec |
Looking at the backlog for the two principal divisions, it becomes apparent that the highest backlog for Logicalis is in Latin America, but the greatest percentage rise in backlog has occurred in North America, with demand outstripping supply. At Westcon, Exhibit 3 shows that backlog growth is centered on hardware fulfilment, although there is also a surprising growth in software backlog, presumably where software fulfilment is dependent on key hardware components.
Divisional review: Strong performance across the group
Management is guiding Datatec to become a global leader in higher-margin, speciality ICT solutions. The group performed strongly in FY22, benefiting in particular from trending demand in networking, cloud usage and cyber security. This positioning enabled all divisions to deliver robust revenue and profit growth in FY22.
Exhibit 4: FY22 revenue by division |
Exhibit 5: FY22 EBITDA by division |
Source: Datatec |
Source: Datatec |
Exhibit 4: FY22 revenue by division |
Source: Datatec |
Exhibit 5: FY22 EBITDA by division |
Source: Datatec |
Logicalis - IT services
Logicalis has the broadest geographical footprint in the group, which meant that although FY22 was a solid year, business was constrained by geopolitical factors. Continuing headwinds from semiconductor shortages, as well as the war in Ukraine, China lockdowns and global inflationary pressures are expected to continue to disrupt global supply chains in FY23 and beyond. This is expected to affect the performance of Logicalis in Latin America for at least H123, increasing uncertainty over Logicalis’s performance in the short and medium term. In FY22, Logicalis revenue increased by 14% to $1.66bn (FY21: $1.45bn), with a 13% increase in EBITDA to $93m (FY21: $82m). EBITDA margins remained broadly stable at 5.6% (FY21: 5.7%), although on an adjusted basis (allowing for the restructuring costs in FY21) they fell from 6.6% to 5.6%.
Exhibit 6: Logicalis revenue by segment |
Exhibit 7: Logicalis revenue by vendor |
Source: Datatec |
Source: Datatec |
Exhibit 6: Logicalis revenue by segment |
Source: Datatec |
Exhibit 7: Logicalis revenue by vendor |
Source: Datatec |
Westcon – Distribution
FY22 was a year of continued improvement for Westcon, despite the uncertain global climate. Westcon remains focused on revenue growth and margin expansion supported by continued investment in process automation and channel investment, coupled with tight cost control. In FY22, revenue increased by 12% to $2.89bn (FY21: $2.59bn) with strong demand for networked infrastructure, remote access solutions, enhanced cyber security for flexible working and unified collaboration tools. Showing the division’s operational gearing, EBITDA lifted by 52% to $68m (FY21: $45m), with margins rising from 1.7% to 2.4%.
Exhibit 8: Westcon revenue by segment |
Exhibit 9: Westcon revenue by customer type |
Source: Datatec |
Source: Datatec |
Exhibit 8: Westcon revenue by segment |
Source: Datatec |
Exhibit 9: Westcon revenue by customer type |
Source: Datatec |
Analysys Mason – Consulting
Revenue at Analysys Mason increased by 24% to $90m (FY21: $73m), with EBITDA rising by 9% to $11.1m (FY21: $10.2m). Excluding share-based payments, adjusted EBITDA rose 27% to $18.1m (FY21: $14.3m), with margins ticking up from 19.5% to 20%. Analysys Mason then completed the acquisition of Northern Sky Research on 30 April 2022 (post year-end), a US-based research and consultancy business focused on the space and satellite sector. Finally, in parallel with the release of the group’s FY22 results, management confirmed that, as a result of the strategic review, Datatec was in discussions with an unnamed buyer over a potential sale of Analysys Mason. Analysys Mason has c 300 employees.
Software & services increased as percentage of group revenues
FY22 annuity revenues, despite growing in absolute terms, fell back slightly year-on-year to represent 9% of group revenues (FY21: 10%). Despite this, when taken together with software and services, the proportion of non-hardware revenues rose marginally to 47% of overall revenues (FY21: 46%). We expect the proportion of non-hardware revenues to continue to increase in the medium term.
Exhibit 10: Minor increase in software/software as a service as proportion of group revenues |
Source: Datatec |
Outlook: Some caution, but established trends remain
Even with management’s understandably cautious tone for H123, particularly for Logicalis Latin America (given the challenging macro-economic situation in Latin America), Datatec remains a defensive player, despite continuing economic and geopolitical uncertainties (growing price and wage inflation, the war in Ukraine, lockdowns). Management expects the technology trends that benefited the business in FY21 and FY22 - ongoing digitalisation driving demand for software-as-a-service solutions, investment in hybrid working and cybersecurity - to continue in FY23.
As we have noted, supply chain issues and semiconductor shortages have constrained Datatec’s ability to meet demand in FY22, leading to a growing backlog of pending orders. Although we expect supply chain issues to continue into FY23, we then expect the backlog to start steadily to unwind, providing additional demand to support sales in H223 and FY24. Management has noted that it expects a weak performance from Logicalis in Latin America in H123 as macroeconomic challenges and supply chain constraints continue to affect the region.
Software & services (FY22: 47% of revenues) is expected to continue to grow as a proportion of sales, with the group continuing to focus on networking, security and cloud infrastructure. This means the business is becoming progressively less asset intensive, benefiting from structural working capital improvements.
With FY22 net debt of $130m and leverage of 20%, the group has a strong balance sheet to support future growth. Although, Westcon absorbs cash as it grows, limiting cash generation in FY23 and FY24.
Estimates: FY23/24 revenues rise, margins softened
We have made some changes to our FY23 and FY24 estimates following Datatec’s FY22 results, increasing net revenue growth in FY23 to 6%, slowing to 4% in FY24. Given the wide economic uncertainties, we have softened gross margins by 0.2% to 16.9% in FY23 and 17.0% in FY24, although both are still higher than the 16.6% in FY22. Adjusted EBITDA margins in FY23 and FY24 soften slightly to 3.9% (FY22: 3.8%), with share-based payments in FY23 at a similar level to FY22 ($22.5m), falling to $13.5m in FY24 once the current Westcon incentive scheme expires. We have also assumed an increase in net finance costs (FY22: 5.9%), raising these to 7.0% for FY23 and subsequent years to reflect rising interest rates (particularly in Latin America) and higher utilisation of facilities. With the anticipated growth of Westcon, coupled with high inventory levels and backlog in FY23, we assume an increase in net debt in FY23, to $154m, remaining at a similar level of $161m in FY24. We have also introduced forecasts for FY25, with revenues of $5.3bn and adjusted EBITDA of $218m.
Exhibit 11: Revised estimates
28-February |
2022 |
2023e |
2024e |
2025e |
||||||||
$m |
Actual |
Y-o-y growth (%) |
Old |
New |
Y-o-y growth (%) |
Change (%) |
Old |
New |
Y-o-y growth |
Change (%) |
New |
Y-o-y growth (%) |
Revenue |
4,637 |
13 |
4,757 |
4,919 |
6 |
3 |
5,029 |
5,117 |
4 |
2 |
5,323 |
4 |
Gross Profit |
770 |
12 |
816 |
829 |
8 |
2 |
871 |
871 |
5 |
(0) |
915 |
5 |
Adj. EBITDA |
177 |
36 |
193 |
191 |
8 |
(1) |
215 |
201 |
5 |
(7) |
218 |
8 |
EBITDA |
155 |
30 |
193 |
168 |
9 |
(13) |
215 |
188 |
11 |
(13) |
204 |
9 |
Normalised operating profit |
117 |
19 |
138 |
135 |
15 |
(2) |
162 |
148 |
10 |
(9) |
167 |
13 |
Profit Before Tax (norm) |
85 |
16 |
108 |
96 |
13 |
(11) |
131 |
107 |
12 |
(18) |
125 |
16 |
Net income (normalised) |
38 |
41 |
53 |
42 |
11 |
(20) |
71 |
55 |
29 |
(23) |
65 |
20 |
Company underlying uEPS (c) |
18.7 |
38 |
24.3 |
19.6 |
5 |
(19) |
32.6 |
25.2 |
29 |
(23) |
30.2 |
20 |
Dividend (c) |
39.3 |
8.1 |
6.5 |
10.9 |
8.4 |
10.1 |
||||||
Revenue growth (%) |
12.8 |
5.4 |
6.1 |
5.7 |
4.0 |
4.0 |
||||||
Gross Margin (%) |
16.6 |
17.1 |
16.9 |
17.3 |
17.0 |
17.2 |
||||||
Adj. EBITDA Margin (%) |
3.8 |
4.0 |
3.9 |
4.3 |
3.9 |
4.1 |
||||||
Normalised Operating Margin |
2.5 |
2.9 |
2.7 |
3.2 |
2.9 |
3.1 |
||||||
Closing net debt/(cash) |
130 |
192 |
154 |
151 |
161 |
157 |
Source: Datatec accounts, Edison Investment Research
Defensive growth with strategic upside
Off the back of FY22, all three of Datatec’s divisions can now point to a track record of solid profitability. Following the group’s strong performance in FY22, we have raised our revenue estimates, but softened margins to reflect increasing uncertainties. Datatec’s shares still trade on only 3.5x FY23e EV/adjusted EBITDA and 12.5x FY23e P/E. The shares also offer a 2.7% prospective dividend yield, as well as incremental upside from any uplift following the conclusion of the group strategic review, with a sale of Analysys Mason looking like the most likely initial outcome.
As we have stated before, we believe Datatec’s valuation is backward looking and does not reflect the positive transformation of the business and its improved operational performance. From peer analysis, a blended multiple of 9x FY23 EV/EBITDA or 14x FY23 P/E would appear justifiable.
Exhibit 12: Peer group for Logicalis
Name |
Share price |
Quoted ccy |
EV ($m) |
Gross margin 1FY (%) |
EBITDA margin 1FY (%) |
EBIT margin 1FY (%) |
EV/sales 1FY (x) |
EV/sales 2FY (x) |
EV/ EBITDA 1FY (x) |
EV/ EBITDA 2FY (x) |
Atea |
107.2 |
NOK |
1,432 |
20.3 |
4.3 |
2.8 |
0.3 |
0.3 |
7.4 |
6.6 |
Bechtle |
41.8 |
EUR |
5,709 |
17.3 |
8.0 |
6.1 |
0.9 |
0.8 |
11.6 |
10.8 |
Cancom |
37.6 |
EUR |
986 |
31.8 |
9.3 |
6.1 |
0.7 |
0.6 |
7.2 |
6.4 |
CDW |
174.3 |
USD |
29,768 |
18.3 |
8.5 |
8.1 |
1.2 |
1.1 |
14.2 |
13.2 |
Computacenter |
2508.0 |
GBp |
3,744 |
12.9 |
5.0 |
3.8 |
0.4 |
0.4 |
8.3 |
8.1 |
Converge Technology |
7.1 |
CAD |
1,211 |
22.2 |
6.9 |
4.9 |
0.6 |
0.5 |
8.8 |
6.6 |
Econocom |
3.8 |
EUR |
1,094 |
27.9 |
7.0 |
5.4 |
0.4 |
0.4 |
5.8 |
5.5 |
ePlus |
58.5 |
USD |
1,449 |
25.2 |
8.8 |
9.2 |
0.7 |
0.7 |
8.4 |
7.9 |
Insight Enterprises |
100.7 |
USD |
4,136 |
15.2 |
4.4 |
3.8 |
0.4 |
0.4 |
8.9 |
8.2 |
Reply |
124.0 |
EUR |
4,758 |
NM |
16.8 |
13.8 |
2.5 |
2.3 |
15.1 |
13.7 |
Sopra Steria |
164.1 |
EUR |
4,401 |
56.4 |
11.8 |
7.9 |
0.8 |
0.8 |
7.0 |
6.4 |
Mean |
|
|
|
24.7 |
8.3 |
6.5 |
0.8 |
0.8 |
9.3 |
8.5 |
Median |
|
|
|
21.2 |
8.0 |
6.1 |
0.7 |
0.6 |
8.4 |
7.9 |
Source: Refinitiv. Note: Priced at 9 June 2022.
Exhibit 13: Peer group for Westcon International
|
Share price |
Quoted ccy |
EV ($m) |
Gross margin 1FY (%) |
EBITDA margin 1FY (%) |
EBIT margin 1FY (%) |
EV/sales 1FY (x) |
EV/sales 2FY (x) |
EV/ EBITDA 1FY (x) |
EV/ EBITDA 2FY (x) |
Also Holding |
196.2 |
CHF |
2,304 |
5.6 |
2.2 |
1.9 |
0.2 |
0.2 |
7.5 |
7.0 |
Arrow Electronics |
122.0 |
USD |
11,099 |
13.0 |
6.1 |
5.6 |
0.3 |
0.3 |
4.8 |
5.3 |
Avnet |
48.4 |
USD |
5,875 |
12.2 |
4.4 |
4.0 |
0.2 |
0.2 |
5.5 |
5.5 |
Esprinet |
8.0 |
EUR |
539 |
5.1 |
1.9 |
1.6 |
0.1 |
0.1 |
5.3 |
4.5 |
Exclusive Networks |
16.5 |
EUR |
2,026 |
11.7 |
4.7 |
3.4 |
0.6 |
0.5 |
12.8 |
11.4 |
Scansource |
38.3 |
USD |
1,105 |
12.2 |
4.8 |
4.1 |
0.3 |
0.3 |
6.6 |
6.2 |
Sesa |
132.8 |
EUR |
2,087 |
NM |
7.1 |
5.0 |
0.8 |
0.7 |
11.8 |
10.1 |
TD Synnex |
104.6 |
USD |
14,590 |
5.9 |
3.0 |
2.6 |
0.2 |
0.2 |
7.7 |
7.3 |
Wesco International |
136.6 |
USD |
11,625 |
21.2 |
7.4 |
6.4 |
0.6 |
0.5 |
7.6 |
7.1 |
WPG Holdings |
57.1 |
TWD |
8,000 |
3.8 |
1.8 |
1.8 |
0.3 |
0.3 |
15.7 |
17.1 |
Mean |
|
|
|
10.1 |
4.4 |
3.6 |
0.4 |
0.3 |
8.5 |
8.2 |
Median |
|
|
|
11.7 |
4.6 |
3.7 |
0.3 |
0.3 |
7.5 |
7.1 |
Source: Refinitiv. Note: Priced at 9 June 2022.
Exhibit 14: Peer group for Analysys Mason
|
Share price |
Quoted ccy |
EV ($m) |
Gross margin 1FY (%) |
EBITDA margin 1FY (%) |
EBIT margin 1FY (%) |
EV/sales 1FY (x) |
EV/sales 2FY (x) |
EV/ EBITDA 1FY (x) |
EV/ EBITDA 2FY (x) |
Accenture |
302.64 |
USD |
195,665 |
32.1 |
18.5 |
15.2 |
3.2 |
2.9 |
17.1 |
15.6 |
Booz Allen Hamilton |
86.93 |
USD |
13,596 |
44.4 |
10.8 |
9.4 |
1.5 |
1.4 |
14.0 |
13.1 |
Capgemini |
178.50 |
EUR |
37,358 |
27.4 |
15.7 |
12.1 |
1.7 |
1.6 |
10.8 |
9.8 |
Forrester Research |
49.26 |
USD |
858 |
59.1 |
14.0 |
12.2 |
1.5 |
1.4 |
11.0 |
9.6 |
FTI Consulting |
169.64 |
USD |
5,905 |
30.9 |
12.7 |
11.1 |
2.0 |
1.8 |
15.6 |
13.1 |
Gartner |
261.30 |
USD |
23,051 |
68.6 |
22.0 |
17.2 |
4.3 |
3.9 |
19.7 |
18.3 |
GlobalData |
1157.50 |
GBp |
1,982 |
NM |
34.3 |
31.5 |
7.1 |
6.6 |
20.8 |
18.2 |
Huron Consulting |
59.92 |
USD |
1,599 |
29.96667 |
11.8 |
9.1 |
1.6 |
1.4 |
13.1 |
11.6 |
Wipro |
5.97 |
USD |
30,379 |
30 |
19.9 |
17.0 |
NM |
NM |
NM |
NM |
Mean |
|
|
|
17.8 |
15.0 |
2.9 |
2.6 |
15.3 |
13.6 |
17.8 |
Median |
|
|
|
15.7 |
12.2 |
1.8 |
1.7 |
14.8 |
13.1 |
15.7 |
Source: Refinitiv. Note: Priced at 9 June 2022.
Given the announcement of negotiations around the potential sale of Analysys Mason, we include an updated estimate of the potential value of the divisions on a standalone basis using the peer group multiples (Exhibit 15).
Exhibit 15: Divisional valuations based on peer multiples
|
Implied EV based on |
|||||||||
Revenues, $m |
EBITDA, $m |
Datatec |
Implied mean |
|||||||
Division |
2023e |
2024e |
2023e |
2024e |
economic interest (%) |
EV, $m |
||||
Logicalis |
1,471 |
1,412 |
934 |
883 |
80 |
727 |
||||
Westcon |
1,108 |
1,087 |
679 |
679 |
92 |
626 |
||||
Analysys Mason |
274 |
264 |
290 |
273 |
79 |
219 |
Source: Edison Investment Research
Exhibit 14: Financial summary
28-February |
$'000 |
2020 |
2021 |
2022 |
2023e |
2024e |
2025e |
|
INCOME STATEMENT |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
Revenue |
|
|
4,214,421 |
4,109,463 |
4,636,782 |
4,919,204 |
5,116,930 |
5,322,613 |
Cost of Sales |
(3,472,843) |
(3,418,926) |
(3,866,386) |
(4,089,812) |
(4,245,872) |
(4,407,873) |
||
Gross Profit |
741,578 |
690,537 |
770,396 |
829,392 |
871,058 |
914,740 |
||
Adjusted EBITDA |
|
|
166,280 |
130,125 |
177,050 |
190,900 |
201,229 |
217,686 |
EBITDA |
158,657 |
118,632 |
154,533 |
168,383 |
187,719 |
204,176 |
||
Normalised operating profit |
|
|
105,157 |
97,868 |
116,694 |
134,565 |
148,222 |
167,423 |
Amortisation of acquired intangibles |
(11,297) |
(8,635) |
(10,100) |
(8,420) |
(6,875) |
(5,516) |
||
Exceptionals |
(3,700) |
(27,771) |
(1,946) |
(1,946) |
(1,946) |
(1,946) |
||
Share-based payments |
(7,623) |
(11,493) |
(22,517) |
(22,517) |
(13,510) |
(13,510) |
||
Reported operating profit |
82,537 |
49,969 |
82,131 |
101,682 |
125,891 |
146,451 |
||
Net Interest |
(25,874) |
(25,692) |
(31,309) |
(38,683) |
(40,896) |
(42,729) |
||
Joint ventures & associates (post tax) |
(204) |
908 |
(427) |
0 |
0 |
0 |
||
Exceptionals |
2,029 |
59 |
540 |
0 |
0 |
0 |
||
Profit Before Tax (norm) |
|
|
79,079 |
73,084 |
84,958 |
95,883 |
107,326 |
124,695 |
Profit Before Tax (reported) |
|
|
58,488 |
25,244 |
50,935 |
63,000 |
84,995 |
103,722 |
Reported tax |
(31,809) |
(19,540) |
(10,602) |
(20,160) |
(27,198) |
(33,191) |
||
Profit After Tax (norm) |
34,615 |
30,035 |
44,507 |
51,249 |
64,685 |
76,051 |
||
Profit After Tax (reported) |
26,679 |
5,704 |
40,333 |
42,840 |
57,797 |
70,531 |
||
Minority interests |
(13,772) |
(3,103) |
(6,431) |
(8,864) |
(10,075) |
(10,774) |
||
Discontinued operations |
1,332 |
0 |
0 |
0 |
0 |
0 |
||
Net income (normalised) |
20,843 |
26,939 |
38,076 |
42,385 |
54,610 |
65,277 |
||
Net income (reported) |
14,239 |
2,601 |
33,902 |
33,975 |
47,721 |
59,757 |
||
Average number of shares outstanding (m) |
210.5 |
198.8 |
203.2 |
216.4 |
216.4 |
216.4 |
||
EPS - normalised (c) |
|
|
9.9 |
13.6 |
18.7 |
19.6 |
25.2 |
30.2 |
EPS - diluted normalised (c) |
|
|
9.7 |
13.2 |
18.2 |
19.0 |
24.5 |
29.3 |
EPS - basic reported (c) |
|
|
6.8 |
1.3 |
16.7 |
15.7 |
22.1 |
27.6 |
EPS - Company underlying uEPS (c) |
|
|
9.9 |
13.6 |
18.7 |
19.6 |
25.2 |
30.2 |
Dividend (c) |
7.0 |
6.6 |
39.3 |
6.5 |
8.4 |
10.1 |
||
Revenue growth (%) |
(2.7) |
(2.5) |
12.8 |
6.1 |
4.0 |
4.0 |
||
Gross Margin (%) |
17.6 |
16.8 |
16.6 |
16.9 |
17.0 |
17.2 |
||
Adj. EBITDA Margin (%) |
3.9 |
3.2 |
3.8 |
3.9 |
3.9 |
4.1 |
||
Normalised Operating Margin |
2.5 |
2.4 |
2.5 |
2.7 |
2.9 |
3.1 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
512,598 |
554,690 |
613,155 |
601,722 |
594,674 |
592,340 |
Intangible Assets |
291,279 |
314,486 |
320,089 |
324,877 |
328,807 |
332,644 |
||
Tangible Assets |
43,300 |
39,987 |
32,517 |
27,397 |
24,474 |
23,616 |
||
Right-of-use assets |
83,953 |
94,837 |
80,639 |
69,538 |
61,483 |
56,170 |
||
Investments & other |
94,066 |
105,380 |
179,910 |
179,910 |
179,910 |
179,910 |
||
Current Assets |
|
|
2,083,928 |
2,242,568 |
2,399,078 |
2,564,392 |
2,712,973 |
2,852,523 |
Stocks |
253,271 |
242,005 |
309,227 |
355,299 |
392,121 |
407,083 |
||
Debtors |
1,110,510 |
1,108,105 |
1,223,824 |
1,329,999 |
1,422,927 |
1,516,580 |
||
Cash & cash equivalents |
347,189 |
488,632 |
453,926 |
466,006 |
483,749 |
513,490 |
||
Other |
372,958 |
403,826 |
412,101 |
413,089 |
414,175 |
415,371 |
||
Current Liabilities |
|
|
(1,765,823) |
(1,980,013) |
(2,152,175) |
(2,269,546) |
(2,332,244) |
(2,380,552) |
Creditors |
(1,259,013) |
(1,385,208) |
(1,526,163) |
(1,606,502) |
(1,643,274) |
(1,664,614) |
||
Tax and social security |
(16,677) |
(16,596) |
(18,035) |
(18,035) |
(18,035) |
(18,035) |
||
Short term borrowings |
(338,945) |
(392,877) |
(433,176) |
(459,560) |
(478,032) |
(497,247) |
||
Lease liabilities |
(34,325) |
(36,398) |
(32,870) |
(34,872) |
(36,274) |
(37,732) |
||
Other |
(116,863) |
(148,934) |
(141,931) |
(150,576) |
(156,628) |
(162,924) |
||
Long Term Liabilities |
|
|
(187,610) |
(176,624) |
(229,112) |
(242,524) |
(251,914) |
(261,682) |
Long term borrowings |
(18,638) |
(42,371) |
(56,440) |
(59,878) |
(62,284) |
(64,788) |
||
Lease liabilities |
(95,148) |
(77,847) |
(61,523) |
(65,270) |
(67,894) |
(70,623) |
||
Other long term liabilities |
(73,824) |
(56,406) |
(111,149) |
(117,376) |
(121,736) |
(126,271) |
||
Net Assets |
|
|
643,093 |
640,621 |
630,946 |
654,044 |
723,489 |
802,629 |
Minority interests |
(70,778) |
(57,465) |
(67,516) |
(76,380) |
(86,456) |
(97,230) |
||
Shareholders equity |
|
|
572,315 |
583,156 |
563,430 |
577,664 |
637,033 |
705,400 |
CASH FLOW |
||||||||
Op Cash Flow before WC and tax |
169,980 |
157,896 |
178,996 |
192,846 |
203,175 |
219,632 |
||
Working capital |
57,231 |
79,903 |
(76,807) |
(71,907) |
(92,979) |
(87,275) |
||
Exceptional & other |
(11,642) |
(33,318) |
(24,314) |
(26,703) |
14,271 |
15,102 |
||
Tax |
(36,941) |
(36,597) |
(26,282) |
(20,160) |
(27,198) |
(33,191) |
||
Operating cash flow |
|
|
178,628 |
167,884 |
51,593 |
74,076 |
97,269 |
114,268 |
Capex |
(28,036) |
(35,145) |
(24,841) |
(25,395) |
(25,977) |
(26,588) |
||
Acquisitions/disposals |
(9,179) |
(3,694) |
(16,424) |
0 |
0 |
0 |
||
Net interest |
(25,874) |
(25,692) |
(31,309) |
(38,683) |
(40,896) |
(42,729) |
||
Equity financing |
(51,683) |
(2,808) |
0 |
0 |
0 |
0 |
||
Dividends |
(15,137) |
(4,905) |
(43,136) |
(14,132) |
(18,199) |
(21,758) |
||
Other |
20,019 |
1,880 |
(8,409) |
(19,358) |
(19,358) |
(19,358) |
||
Net Cash Flow |
68,738 |
97,520 |
(72,526) |
(23,492) |
(7,160) |
3,835 |
||
Opening net debt/(cash) |
|
|
100,753 |
139,867 |
60,861 |
130,083 |
153,575 |
160,735 |
FX |
(9,270) |
(6,287) |
3,304 |
0 |
0 |
0 |
||
Other non-cash movements |
(98,582) |
(12,227) |
0 |
0 |
0 |
0 |
||
Closing net debt/(cash) |
|
|
139,867 |
60,861 |
130,083 |
153,575 |
160,735 |
156,900 |
Source: Datatec accounts, Edison Investment Research
|
|
Research: Healthcare
OpGen has announced plans to commercialize its Unyvero portfolio in the United Arab Emirates and Qatar through a new distribution agreement with Leader Life Sciences (LLS). This approach is similar to the company’s European roll-out, leveraging local networks to expand and strengthen Unyvero’s presence. Regulatory approval/product registration will be required in both markets before product launch, which will be initiated and managed by LLS. The three-year distribution agreement can be extended in annual increments and there is a minimum commitment for LLS to purchase at least eight Unyvero systems and unspecified numbers of cartridges (reflecting c $1m in transfer price-based revenues to OpGen).
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