Last close As at 05/08/2026
EUR15.00
— 0.00 (0.00%)
Market capitalisation
EUR709m
Research: TMT
Tinexta’s Q320 results demonstrate that its business units are recovering post-COVID lockdowns better than management initially expected, while developing new revenue opportunities. Management’s increased FY20 guidance appears conservative, implying a y-o-y decline in Q420 EBITDA of 7%, reflecting its typical caution and the tough comparative. The announced acquisitions for Warrant Hub are consistent with the strategy of expanding outside Italy. The dissolution of the joint venture with LuxTrust will enable Tinexta to develop Digital Trust in France.
Tinexta |
Strong recovery fuelling upgrades |
Q320 results |
Professional services |
16 November 2020 |
Share price performance
Business description
Next events
Analysts
Tinexta is a research client of Edison Investment Research Limited |
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Tinexta’s Q320 results demonstrate that its business units are recovering post-COVID lockdowns better than management initially expected, while developing new revenue opportunities. Management’s increased FY20 guidance appears conservative, implying a y-o-y decline in Q420 EBITDA of 7%, reflecting its typical caution and the tough comparative. The announced acquisitions for Warrant Hub are consistent with the strategy of expanding outside Italy. The dissolution of the joint venture with LuxTrust will enable Tinexta to develop Digital Trust in France.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/18 |
238.7 |
52.3 |
0.77 |
0.23 |
27.7 |
1.1 |
12/19 |
258.7 |
55.0 |
0.80 |
0.00 |
26.9 |
0.0 |
12/20e |
272.7 |
57.3 |
0.87 |
0.26 |
24.8 |
1.2 |
12/21e |
283.8 |
60.9 |
0.92 |
0.27 |
23.3 |
1.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q320: Growth in all business units
In a typically seasonally less important quarter, Tinexta reported strong y-o-y growth in organic revenue (18.5%) and adjusted EBITDA (45.9%). The most notable performance was in Credit Information & Management (CIM, organic revenue +38.7%) as it continued to benefit from helping clients gain access to government-backed financial assistance post-COVID, while macro weakness affects its core businesses. Digital Trust quickly returned towards traditional growth rates (9.9%) in Q320. Innovation & Marketing Services’ organic growth was 12.9%, with similar trends to Q220. Strong free cash flow generation, +84% y-o-y to €23.7m, reflects the higher EBITDA margin (33.9% vs 27.3% in Q319) due to good cost control and mix changes, and improved working capital, leading to a significant improvement in the net financial position of €92m vs €113m at the end of Q220.
FY20: Guidance increased but looks conservative
Management increased FY20 guidance: revenue of more than €260m (previously more than €250m), growth of at least 1% y-o-y, and EBITDA close to €80m (previously more than €72m), growth of 12% if Tinexta reports €80m. The increase, due to highlighted revenue for CIM and the better than expected recovery from COVID weakness, seems conservative, implying a Q420 EBITDA decline of c 7% y-o-y, but is against a tough comparative (Q419 organic revenue growth 11.8%). We upgrade our FY20 EBITDA forecast to €81m from €76.7m, reflecting the flow through from outperformance in Q320. There is uncertainty as to how much of the new revenue for CIM will recur in FY21. We assume half is recurring, representing a headwind for group growth next year.
Valuation: Re-rated due to better growth outlook
On our new forecasts, EV/EBITDA for FY20e is 13.3x, a premium to the long-run average of 8.5x, reflecting an improved growth outlook. Our forecasts are before the inclusion of estimates for Cybersecurity, which is expected to improve the growth outlook for Tinexta (see our update note published on 19 October).
Exhibit 1: Financial summary
€m |
2018 |
2019 |
2020e |
2021e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||
Revenue |
|
|
238.7 |
258.7 |
272.7 |
283.8 |
Operating costs |
(172.1) |
(181.9) |
(191.7) |
(199.9) |
||
EBITDA before non-recurring costs |
|
|
66.6 |
76.8 |
81.0 |
83.9 |
EBITDA |
|
|
66.0 |
71.3 |
81.0 |
83.9 |
Normalised operating profit |
|
|
54.3 |
59.0 |
60.7 |
62.9 |
Amortisation of acquired intangibles |
(5.8) |
(5.9) |
(5.8) |
(5.8) |
||
Exceptionals |
(0.6) |
(5.5) |
0.0 |
0.0 |
||
Share-based payments |
0.0 |
0.0 |
0.0 |
0.0 |
||
Reported operating profit |
47.9 |
47.5 |
54.9 |
57.1 |
||
Net Interest |
(2.5) |
(4.1) |
(1.5) |
(2.0) |
||
Joint ventures & associates (post tax) |
0.1 |
(1.1) |
(1.1) |
0.0 |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
52.3 |
55.0 |
57.3 |
60.9 |
Profit Before Tax (reported) |
|
|
45.5 |
42.2 |
52.2 |
55.1 |
Reported tax |
(12.6) |
(13.4) |
(15.4) |
(16.3) |
||
Profit After Tax (norm) |
36.8 |
38.3 |
40.4 |
43.0 |
||
Profit After Tax (reported) |
32.9 |
28.8 |
36.8 |
38.9 |
||
Minority interests |
(0.6) |
(0.6) |
(0.5) |
(0.5) |
||
Discontinued operations |
0.0 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
36.2 |
37.7 |
39.9 |
42.5 |
||
Net income (reported) |
32.4 |
28.2 |
36.4 |
38.4 |
||
Average number of shares outstanding (m) |
46.6 |
47.0 |
46.1 |
46.1 |
||
EPS - normalised (€) |
|
|
0.78 |
0.80 |
0.87 |
0.92 |
EPS - normalised fully diluted (c) |
|
|
77.36 |
79.71 |
86.62 |
92.08 |
EPS - basic reported (€) |
|
|
0.69 |
0.60 |
0.79 |
0.83 |
Dividend (€) |
0.23 |
0.00 |
0.26 |
0.27 |
||
Revenue growth (%) |
36.6 |
8.4 |
5.4 |
4.1 |
||
EBITDA Margin before non-recurring costs (%) |
27.9 |
29.7 |
29.7 |
29.6 |
||
Normalised Operating Margin |
22.8 |
22.8 |
22.2 |
22.2 |
||
BALANCE SHEET |
||||||
Fixed Assets |
|
|
307.1 |
316.7 |
308.4 |
300.2 |
Intangible Assets |
272.1 |
269.9 |
267.2 |
264.4 |
||
Tangible Assets |
8.2 |
21.2 |
15.6 |
10.2 |
||
Investments & other |
26.8 |
25.6 |
25.6 |
25.6 |
||
Current Assets |
|
|
143.4 |
139.4 |
175.8 |
213.3 |
Stocks |
1.3 |
1.1 |
1.2 |
1.3 |
||
Debtors |
86.3 |
89.8 |
94.6 |
98.5 |
||
Cash & cash equivalents |
35.1 |
33.6 |
65.1 |
98.7 |
||
Other financial assets |
8.2 |
6.6 |
6.6 |
6.6 |
||
Other |
12.4 |
8.2 |
8.2 |
8.2 |
||
Current Liabilities |
|
|
(194.4) |
(160.4) |
(161.7) |
(164.1) |
Creditors |
(93.9) |
(92.7) |
(93.9) |
(96.3) |
||
Tax and social security |
(0.7) |
(2.9) |
(2.9) |
(2.9) |
||
Short term borrowings |
(97.4) |
(62.0) |
(62.0) |
(62.0) |
||
Other |
(2.4) |
(2.9) |
(2.9) |
(2.9) |
||
Long Term Liabilities |
|
|
(110.8) |
(146.2) |
(146.2) |
(146.2) |
Long term borrowings |
(70.7) |
(107.0) |
(107.0) |
(107.0) |
||
Other long-term liabilities |
(40.2) |
(39.2) |
(39.2) |
(39.2) |
||
Net Assets |
|
|
145.4 |
149.4 |
176.3 |
203.1 |
Minority interests |
(3.8) |
(3.9) |
(4.3) |
(4.8) |
||
Shareholders' equity |
|
|
141.6 |
145.6 |
171.9 |
198.3 |
CASH FLOW |
||||||
Operating cash flow |
|
|
43.4 |
55.2 |
55.0 |
60.4 |
Capex |
(13.1) |
(13.5) |
(12.0) |
(12.8) |
||
Acquisitions/disposals |
(33.2) |
(47.5) |
(30.0) |
0.0 |
||
Net interest |
(1.4) |
(2.5) |
(1.5) |
(2.0) |
||
Equity financing |
1.1 |
1.1 |
(10.0) |
0.0 |
||
Dividends |
(12.1) |
(16.4) |
0.0 |
(12.0) |
||
Borrowings |
17.3 |
23.7 |
0.0 |
0.0 |
||
Other |
(3.9) |
(1.7) |
30.0 |
0.0 |
||
Net Cash Flow |
(1.9) |
(1.5) |
31.5 |
33.6 |
||
Opening net debt/(cash) |
|
|
103.8 |
123.8 |
128.0 |
96.5 |
FX |
0.0 |
0.0 |
0.0 |
0.0 |
||
Other non-cash movements |
(18.1) |
(2.6) |
0.0 |
0.0 |
||
Closing net debt/(cash) |
|
|
123.8 |
128.0 |
96.5 |
62.9 |
Source: Company accounts, Edison Investment Research
|
|
Research: Investment Companies
Gervais Williams’ and Martin Turner’s multi-cap approach to managing The Diverse Income Trust (DIVI) has yet again paid off, protecting on the downside. The trust has topped the ranks of UK high dividend yield peers over the past 12 months, and remains in the top quartile by NAV total return over the medium term. It has also materially outperformed the comparative indices since launch in 2011, demonstrating the managers’ skill to pick winners, patience, consistent approach, and the ability to diversify away most of the risk of dividend cuts. Williams believes that DIVI’s small- and mid-cap tilted portfolio is well positioned to continue benefiting from increased investor demand for cash-generative businesses, caused by fears over the current coronavirus pandemic and lockdowns.