Claranova — Transition to pure play software business ongoing

Claranova (PAR: CLA)

Last close As at 16/05/2025

EUR2.84

0.00 (0.00%)

Market capitalisation

EUR163m

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Research: TMT

Claranova — Transition to pure play software business ongoing

Claranova’s Q325 revenue update confirmed that Avanquest generated modest year-on-year growth, with profitability continuing to improve for the Security and PDF product lines. The group restructuring process continues, with the proposed disposal of PlanetArt targeted to close by the end of June and the company continuing to seek a buyer for myDevices.

Katherine Thompson

Written by

Katherine Thompson

Director

Software and comp services

Q325 revenue update

19 May 2025

Price €2.84
Market cap €157m

Net cash/(debt) at end FY24

€(102.0)m

Shares in issue

57.2m
Free float 84.0%
Code CLA
Primary exchange NXT PA
Secondary exchange N/A
Price Performance
% 1m 3m 12m
Abs 22.5 88.0 14.9
52-week high/low €2.7 €1.1

Business description

Claranova consists of three businesses focused on mobile and internet technologies: PlanetArt (digital photo printing; personalised gifts), Avanquest (consumer software) and myDevices (IoT).

Next events

FY25 revenue update

31 July

Analyst

Katherine Thompson
+44 (0)20 3077 5700

Claranova is a research client of Edison Investment Research Limited

Note: EBITDA is pre-IFRS 16. PBT and diluted EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments. From FY25e, excludes myDevices as held for sale.

Year end Revenue (€m) EBITDA (€m) PBT (€m) EPS (€) P/E (x)
6/23 507.0 32.5 2.2 0.05 61.8
6/24 495.6 45.9 5.8 0.09 31.5
6/25e 498.2 53.0 29.6 0.40 7.1
6/26e 534.6 58.2 33.7 0.45 6.3

Stable performance in Q325

As the only business now reported in continuing operations, Avanquest saw 4% y-o-y revenue growth on a constant currency organic basis in Q325 and 3% for 9M25. Security was the strongest area, with new subscriber growth in the period. The continued focus on profitability means that marketing spend has been moderated in those areas where new product features are currently being developed. As previously highlighted, all software is now based on own-IP, which should support higher profitability. We note that our forecasts continue to include PlanetArt within continuing operations due to the difficulty in allocating operating, finance and tax costs to the two businesses.

Aiming to close PlanetArt sale by end FY25

In March, Claranova announced that it had entered into exclusive negotiations to sell PlanetArt. It confirmed in the Q3 update that negotiations are ongoing and that it continues to target deal completion by the end of June. There has been interest in myDevices but no buyer has yet emerged.

Valuation: Avanquest growth to drive upside

From our sum-of-the-parts valuation, we calculate an enterprise value after minority interests of €312m and an equity value of €176m or €3.1 per share. This assumes Claranova receives 80% of the proposed disposal value of PlanetArt and incurs costs of €10m in the sale process. We have placed a relatively conservative valuation on Avanquest. If the latest initiatives to expand into the B2B market successfully accelerate revenue growth, we see scope for upside to our valuation.

Q325 revenue update

As the company announced in March that it was in negotiations to sell PlanetArt, from Q325 it has reported only Avanquest’s revenue within continuing operations. It has separately disclosed the performance of PlanetArt and myDevices.

Our forecasts continue to include PlanetArt within continuing operations due to the impracticalities of separating out the business from the group financials. We had already included myDevices within discontinued operations. The table below shows the revenue performance of all divisions.

Avanquest: Modest growth in Q3

The division reported 2% y-o-y growth in revenue for Q325. After taking account of currency (c 40% of revenue is from the US), growth was 4% y-o-y. Management noted that it saw solid growth in subscribers within its Security segment and this was the main driver of growth. With its continued focus on profitability, the business has moderated marketing spend, particularly in the Photo business where it is in the process of developing new features. For the first nine months of the year (9M25), the business reported a 1% revenue decline. After adjusting for currency and the sale of the non-core business in October 2023, like-for-like revenue was up 3% y-o-y. For 9M25, non-core activities generated revenue of €7m (8% of sales) compared to €10m in 9M24. Management confirmed that profitability continues to improve for Security and PDF.

Update on bid for PlanetArt

Management confirmed that the disposal process is ongoing, and it is working on finalising the agreement to sell PlanetArt with the aim of closing the sale before the end of June. The revenue just reported for PlanetArt is uncontroversial and broadly in line with performance for the prior quarters of the year.

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