PCI-PAL — Record H1 new business

PCI-PAL (AIM: PCIP)

Last close As at 02/02/2026

GBP0.55

−0.50 (−0.91%)

Market capitalisation

GBP40m

More on this equity

Research: TMT

PCI-PAL — Record H1 new business

PCI Pal’s H126 trading update confirmed strong growth in both annual recurring revenue (ARR) and contracted ARR (CARR) after winning record new business for a first half. Revenue increased 7% y-o-y, or 14% on a normalised basis. Management commented that it was seeing the highest levels of demand for its core secure payments products and a highly encouraging sales pipeline entering H2, giving it confidence that the group can meet the board’s expectations for FY26. We maintain our forecasts.

Katherine Thompson

Written by

Katherine Thompson

Director

Software and comp services

H126 trading update

3 February 2026

Price 54.50p
Market cap £39m

Net cash/(debt) at end H126

£2.6m

Shares in issue

72.5m
Free float 89.4%
Code PCIP
Primary exchange AIM
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 6.8 19.6 (23.1)
52-week high/low 72.0p 42.5p

Business description

PCI-PAL (PCI Pal) is a global cloud provider of secure payment solutions for business communications.

Next events

H126 results

March

Analyst

Katherine Thompson
+44 (0)20 3077 5700

PCI-PAL is a research client of Edison Investment Research Limited

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

Year end Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) DPS (p) EV/EBITDA (x) P/E (x)
6/24 18.0 0.9 (0.6) (1.10) 0.00 42.5 N/A
6/25 22.5 2.3 0.8 0.69 0.00 15.9 78.8
6/26e 24.0 0.7 (1.2) (1.16) 0.00 54.4 N/A
6/27e 27.2 2.2 0.1 0.09 0.00 16.4 N/A

End-H126 ARR +21% y-o-y, CARR +18% y-o-y

ARR stood at £20.3m at the end of H126 (+21% y-o-y, +25% in constant currency (cc)), in line with the company’s target of growing ARR at 18–21% per year in the medium term. CARR stood at £24.0m at the end of H126 (+18% y-o-y, +21% cc), providing the foundation for revenue growth as new customer projects are deployed through the course of H226 and H127. H126 revenue of £11.3m was 7% higher year-on-year, or 14% higher once the one-off revenue deferral reported in H125 is stripped out. Gross revenue retention (GRR) of 95% was flat year-on-year and net revenue retention (NRR) increased to 105% from 103% in H125, showing the benefit of the company’s broader product range.

On track to meet FY26 expectations

We believe that our end-FY26 forecasts for ARR of £22.5m and CARR of £25.2m look achievable based on the H126 performance and the strong sales pipeline. Management pointed to deepening relationships with strategic partners, growth in the SMB and enterprise customer bases, and further penetration of the US healthcare market. Cash at the end of H126 was £2.6m, below our end-FY26 forecast of £3.9m. However, we expect certain customer renewals in H226 to provide a working capital boost and we maintain our forecasts.

Valuation: Only modest growth factored in

The stock is currently trading on EV/sales multiples of 1.5x FY26e and 1.4x FY27e, at a discount to both global CCaaS/UCaaS vendors and UK subscription software providers despite revenue and ARR growth at the higher end of the UK software group. A reverse discounted cash flow analysis shows that the market is only factoring in mid single-digit revenue growth and mid-teen EBITDA margins in the medium to long term, well below the company’s targets. If we assume a higher rate of revenue growth (15% in FY28 trending down to 3% by FY35) and the EBITDA margin expanding to 30% by FY30, we arrive at a valuation of 141.6p/share.

General disclaimer and copyright

This report has been commissioned by PCI-PAL and prepared and issued by Edison, in consideration of a fee payable by PCI-PAL. Edison Investment Research standard fees are £60,000 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 2026 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 sol icitation 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.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

More on PCI-PAL

View All

Latest from the TMT sector

View All TMT content

Research: TMT

discoverIE Group — Organic growth in Q3 orders and sales

discoverIE’s Q326 trading update confirmed that both sales and orders increased year-on-year on an organic basis, with the slower to recover Controls unit showing improving trends. The Keymat Technology acquisition has received regulatory approval and has now been completed while the regulatory approval process for the Trival Antene acquisition is ongoing. Management confirmed that the group is on track to deliver FY26 adjusted earnings in line with the board’s expectations; we maintain our forecasts.

Continue Reading