StatPro Group
Written by
StatPro Group |
Recurring revenue run-rate jumps by 26% |
Half-year trading update |
Software & comp services |
19 July 2016 |
Share price performance
Business description
Next events
Analysts
StatPro Group is a research client of Edison Investment Research Limited |
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Annualised recurring revenue (ARR) jumped by 26% in the year to 30 June, or 13% on a constant currency basis, to £36.2m. This incorporates Investor Analytics, which was acquired in January. Recurring revenue from cloud services now represents 38% of the total, up from 34% (on a proforma basis) in December. With the group’s transaction-based performance solution, Revolution Performance, due to be commercially launched in two months, StatPro is moving into its final stage of cloud transition, after eight years of planning and development. Hence, with StatPro’s US-based financial software peers and SaaS companies trading on lofty multiples, we continue to believe there is significant upside in the shares.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/14 |
32.0 |
2.6 |
2.7 |
2.9 |
33.9 |
3.2 |
12/15 |
30.2 |
2.6 |
2.6 |
2.9 |
34.7 |
3.2 |
12/16e |
34.4 |
2.5 |
2.7 |
2.9 |
34.0 |
3.2 |
12/17e |
36.4 |
3.4 |
3.6 |
2.9 |
25.1 |
3.2 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Trading update: StatPro Revolution ARR jumps 112%
H1 was very busy for StatPro, with two acquisitions (including US-based Investor Analytics for up to $16m) and two major contract wins. The group’s Paris office was downsized as part of the streamlining of finance and administration operations. StatPro Revolution, the cloud-based portfolio analysis service, experienced a 112% jump in ARR, or 90% at constant currencies, to £13.7m (which includes the Investor Analytics cloud solution). Total contracted sales of StatPro Revolution in H1 were £6.4m, boosted by deals with major financial institutions in Australia and the US.
Forecasts: Tweaked for exceptional items
The only change we have made to our forecasts is in increasing FY16 exceptional costs from £0.7m to £1.5m, in line with the update. Hence, our year-end net debt forecast rises from £7.2m to £8.0m. The original guidance for exceptional costs associated with the acquisition of Investor Analytics, announced in January, was £0.7-1.0m. These costs have moved up as GBP weakened and the French office restructuring increased the total charge to c £1.5m. We see increasing potential for upgrades as the year progresses, partly due to the GBP's fall, as revenues are mainly in US dollars and euros. The IA acquisition was funded with US$ debt, creating a natural hedge, but the group also hedges some future earnings, which limits the potential for FY16 upgrades, while FY17 and beyond have greater upside.
Valuation: Highly scalable cloud computing upside
StatPro’s stock trades on c 34x our maintained FY16e EPS, which falls to c 25x in FY17e. Alternatively, the shares trade on c 1.9x FY17e EV/sales, one-third of the level of StatPro’s larger US peers, which typically trade above 5x EV/sales, while US-based pure SaaS companies typically trade in the region of 4.1-6.5x 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 |
34,413 |
36,408 |
Cost of Sales |
0 |
0 |
0 |
0 |
0 |
0 |
||
Gross Profit |
32,001 |
32,486 |
32,018 |
30,187 |
34,413 |
36,408 |
||
EBITDA |
|
|
6,728 |
5,463 |
4,359 |
4,044 |
4,339 |
5,202 |
Adjusted Operating Profit |
|
|
5,534 |
4,327 |
2,875 |
2,852 |
2,924 |
3,721 |
Amortisation of acquired intangibles |
(440) |
(402) |
(188) |
(32) |
0 |
0 |
||
Exceptionals |
(693) |
(347) |
0 |
0 |
(1,500) |
0 |
||
Share based payments |
159 |
(192) |
(26) |
(121) |
(200) |
(213) |
||
Operating Profit |
4,560 |
3,386 |
2,661 |
2,699 |
1,224 |
3,509 |
||
Net Interest |
(493) |
(273) |
(291) |
(290) |
(385) |
(345) |
||
Profit Before Tax (norm) |
|
|
5,041 |
4,054 |
2,584 |
2,562 |
2,539 |
3,376 |
Profit Before Tax (FRS 3) |
|
|
4,067 |
3,113 |
2,370 |
2,409 |
839 |
3,163 |
Tax |
(1,387) |
(1,030) |
(774) |
(788) |
(711) |
(945) |
||
Profit After Tax (norm) |
3,654 |
3,024 |
1,810 |
1,774 |
1,828 |
2,431 |
||
Profit After Tax (FRS 3) |
2,680 |
2,083 |
1,596 |
1,621 |
128 |
2,218 |
||
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 |
3.6 |
EPS - FRS 3 (p) |
|
|
4.3 |
3.1 |
2.4 |
2.4 |
0.1 |
3.3 |
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 |
12.6 |
14.3 |
||
Operating Margin (before GW and except.) (%) |
17.3 |
13.3 |
9.0 |
9.4 |
8.5 |
10.2 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
60,272 |
55,992 |
56,113 |
51,857 |
58,692 |
58,642 |
Intangible Assets |
57,683 |
53,524 |
52,546 |
48,613 |
55,659 |
55,816 |
||
Tangible Assets |
1,974 |
1,883 |
2,470 |
2,233 |
2,022 |
1,816 |
||
Other assets |
615 |
585 |
1,097 |
1,011 |
1,011 |
1,011 |
||
Current Assets |
|
|
10,675 |
10,312 |
10,441 |
10,665 |
2,582 |
2,745 |
Stocks |
0 |
0 |
0 |
0 |
0 |
0 |
||
Debtors |
6,962 |
6,167 |
7,722 |
8,462 |
9,647 |
10,206 |
||
Cash |
3,681 |
4,014 |
2,692 |
2,203 |
(7,064) |
(7,461) |
||
Current Liabilities |
|
|
(19,927) |
(18,514) |
(20,271) |
(19,778) |
(21,289) |
(22,103) |
Creditors |
(19,913) |
(18,502) |
(20,259) |
(19,660) |
(21,171) |
(21,985) |
||
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 |
36,660 |
37,358 |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
9,233 |
9,403 |
7,705 |
6,548 |
6,701 |
9,187 |
Net Interest |
(306) |
(98) |
(10) |
(84) |
(385) |
(345) |
||
Tax |
(1,261) |
(1,616) |
(1,173) |
(832) |
(951) |
(686) |
||
Capex |
(4,187) |
(4,412) |
(5,904) |
(4,999) |
(4,947) |
(5,234) |
||
Acquisitions/disposals |
0 |
(990) |
0 |
0 |
(5,625) |
(1,399) |
||
Equity financing |
5,689 |
0 |
2 |
64 |
(2,100) |
0 |
||
Dividends |
(1,627) |
(1,856) |
(1,889) |
(1,960) |
(1,959) |
(1,920) |
||
Net Cash Flow |
7,541 |
431 |
(1,269) |
(1,263) |
(9,266) |
(396) |
||
Opening net debt/(cash) |
|
|
3,399 |
(3,667) |
(4,002) |
(2,680) |
(1,283) |
7,983 |
Other |
(475) |
(96) |
(53) |
(134) |
0 |
() |
||
Closing net debt/(cash) |
|
|
(3,667) |
(4,002) |
(2,680) |
(1,283) |
7,983 |
8,380 |
Source: Company accounts, Edison Investment Research estimates
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