StatPro Group
Written by
StatPro Group |
Traditional software momentum |
Contract wins |
Software & comp services |
19 September 2016 |
Share price performance
Business description
Next events
Analysts
StatPro Group is a research client of Edison Investment Research Limited |
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StatPro has seen a revival of sales in its traditional software in recent weeks. In early September it announced a £1.5m+ 3.5 year StatPro Seven contract win with a US-based top 10 global asset manager. Today, the group’s Infovest unit has announced a £1.0m seven-year contract with a large North American asset manager. Meanwhile, StatPro is launching its Revolution Performance module later this month. We are maintaining our forecasts, but with the healthy contract momentum and weak sterling, we see an increasing upside risk for forecasts as the year progresses. With StatPro’s US-based fintech peers and SaaS companies trading on lofty multiples, we continue to believe there is significant upside in the shares.
Year |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/14 |
32.0 |
2.6 |
2.7 |
2.9 |
40.1 |
2.7 |
12/15 |
30.2 |
2.6 |
2.6 |
2.9 |
40.9 |
2.7 |
12/16e |
35.5 |
2.8 |
2.7 |
2.9 |
40.0 |
2.7 |
12/17e |
37.6 |
3.7 |
3.7 |
2.9 |
29.4 |
2.7 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
StatPro composites contract win
StatPro is the market leader in composites. A composite is an aggregation of individual portfolios representing a similar investment mandate and the solution is designed for maintaining compliance with Global Investment Performance Standards (GIPS). While the product is part of the legacy Seven platform, it is in modern web-based format. StatPro intends to add composite functionality to StatPro Revolution and meanwhile continues to develop StatPro Composites.
Infovest Consulting contract momentum
In February StatPro exchanged its compliance product, SPC, for a 51% stake in South Africa-based InfoVest, which provides data warehouse, ETL and reporting software to asset managers. As part of the deal, StatPro provides Infovest with access to its global customer base. Infovest has had four new contract wins since the acquisition, with three outside its traditional South African market. The latest contract win is its largest and will significantly increase its recurring revenues.
Revolution Performance launch
Later this month, StatPro will formally launch its new cloud-based performance measurement and data management solution, Revolution Performance. This transaction-based system runs off Amazon cloud and represents the transition of the core component of StatPro’s traditional software platform to the cloud.
Valuation: Highly scalable cloud computing upside
StatPro’s stock trades on c 40x our maintained FY16e EPS, which falls to c 29x in FY17e. Alternatively, the shares trade on c 2.1x FY17e EV/sales, one-third of the level of StatPro’s larger US peers, which mostly trade above 5x EV/sales, while US-based pure SaaS companies typically trade in the region of 4.4-6.8x EV/sales.
Exhibit 1: Financial summary
£'000s |
2012 |
2013 |
2014 |
2015 |
2016e |
2017e |
||
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
PROFIT & LOSS |
||||||||
Revenue |
|
|
32,001 |
32,486 |
32,018 |
30,187 |
35,496 |
37,645 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
0 |
||
Gross Profit |
32,001 |
32,486 |
32,018 |
30,187 |
35,496 |
37,645 |
||
EBITDA |
|
|
6,728 |
5,463 |
4,359 |
4,044 |
4,715 |
5,679 |
Adjusted Operating Profit |
|
|
5,534 |
4,327 |
2,875 |
2,852 |
3,299 |
4,150 |
Amortisation of acquired intangibles |
(440) |
(402) |
(188) |
(32) |
(1,100) |
(1,100) |
||
Exceptionals |
(693) |
(347) |
0 |
0 |
(894) |
0 |
||
Share based payments |
159 |
(192) |
(26) |
(121) |
(200) |
(213) |
||
Operating Profit |
4,560 |
3,386 |
2,661 |
2,699 |
1,106 |
2,838 |
||
Net Interest |
(493) |
(273) |
(291) |
(290) |
(535) |
(470) |
||
Profit Before Tax (norm) |
|
|
5,041 |
4,054 |
2,584 |
2,562 |
2,765 |
3,680 |
Profit Before Tax (FRS 3) |
|
|
4,067 |
3,113 |
2,370 |
2,409 |
571 |
2,368 |
Tax |
(1,387) |
(1,030) |
(774) |
(788) |
(774) |
(1,030) |
||
Profit After Tax (norm) |
3,654 |
3,024 |
1,810 |
1,774 |
1,991 |
2,650 |
||
Profit After Tax (FRS 3) |
2,680 |
2,083 |
1,596 |
1,621 |
(203) |
1,337 |
||
Minority interests |
0 |
0 |
0 |
0 |
(213) |
(271) |
||
Net income (norm) |
3,654 |
3,024 |
1,810 |
1,774 |
1,778 |
2,379 |
||
Net income (statutory) |
2,680 |
2,083 |
1,596 |
1,621 |
(416) |
1,066 |
||
Average Number of Shares Outstanding (m) |
62.2 |
67.5 |
67.5 |
67.6 |
66.2 |
65.1 |
||
EPS - normalised (p) |
|
|
5.9 |
4.5 |
2.7 |
2.6 |
2.7 |
3.7 |
EPS - FRS 3 (p) |
|
|
4.3 |
3.1 |
2.4 |
2.4 |
(0.6) |
1.6 |
Dividend per share (p) |
2.70 |
2.80 |
2.90 |
2.90 |
2.90 |
2.90 |
||
Gross Margin (%) |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
||
EBITDA Margin (%) |
21.0 |
16.8 |
13.6 |
13.4 |
13.3 |
15.1 |
||
Operating Margin (before GW and except.) (%) |
17.3 |
13.3 |
9.0 |
9.4 |
9.3 |
11.0 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
60,272 |
55,992 |
56,113 |
51,857 |
58,054 |
56,995 |
Intangible Assets |
57,683 |
53,524 |
52,546 |
48,613 |
54,876 |
54,029 |
||
Tangible Assets |
1,974 |
1,883 |
2,470 |
2,233 |
2,167 |
1,955 |
||
Other assets |
615 |
585 |
1,097 |
1,011 |
1,011 |
1,011 |
||
Current Assets |
|
|
10,675 |
10,312 |
10,441 |
10,665 |
2,223 |
2,588 |
Stocks |
0 |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
6,962 |
6,167 |
7,722 |
8,462 |
9,950 |
10,553 |
||
Cash |
3,681 |
4,014 |
2,692 |
2,203 |
(7,727) |
(7,965) |
||
Current Liabilities |
|
|
(19,927) |
(18,514) |
(20,271) |
(19,778) |
(21,638) |
(22,507) |
Creditors |
(19,913) |
(18,502) |
(20,259) |
(19,660) |
(21,520) |
(22,389) |
||
Short term borrowings |
(14) |
(12) |
(12) |
(118) |
(118) |
(118) |
||
Long Term Liabilities |
|
|
(1,400) |
(882) |
(598) |
(1,227) |
(3,325) |
(1,926) |
Long term borrowings |
0 |
0 |
0 |
(801) |
(801) |
(801) |
||
Other long term liabilities |
(1,400) |
(882) |
(598) |
(426) |
(2,524) |
(1,125) |
||
Net Assets |
|
|
49,620 |
46,908 |
45,685 |
41,517 |
35,313 |
35,149 |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
9,233 |
9,403 |
7,705 |
6,548 |
7,489 |
9,709 |
Net Interest |
(306) |
(98) |
(10) |
(84) |
(535) |
(470) |
||
Tax |
(1,261) |
(1,616) |
(1,173) |
(832) |
(1,600) |
(747) |
||
Capex |
(4,187) |
(4,412) |
(5,904) |
(4,999) |
(5,209) |
(5,411) |
||
Acquisitions/disposals |
0 |
(990) |
0 |
0 |
(5,536) |
(1,399) |
||
Equity financing |
5,689 |
0 |
2 |
64 |
(2,079) |
0 |
||
Dividends |
(1,627) |
(1,856) |
(1,889) |
(1,960) |
(1,959) |
(1,920) |
||
Net Cash Flow |
7,541 |
431 |
(1,269) |
(1,263) |
(9,429) |
(238) |
||
Opening net debt/(cash) |
|
|
3,399 |
(3,667) |
(4,002) |
(2,680) |
(1,283) |
8,646 |
Other |
(475) |
(96) |
(53) |
(134) |
(500) |
() |
||
Closing net debt/(cash) |
|
|
(3,667) |
(4,002) |
(2,680) |
(1,283) |
8,646 |
8,884 |
Source: StatPro Group accounts, Edison Investment Research estimates
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