Last close As at 05/08/2026
EUR15.00
— 0.00 (0.00%)
Market capitalisation
EUR709m
Research: TMT
Tinexta’s weak Q324 results from its Cyber Security (CS) and Business Innovation (BI) divisions have prompted management to downgrade financial guidance for FY24 for the second time this year. We also take a more cautious stance on expected growth in FY25 and FY26. The c 60% decline in the share price in 2024, versus cumulative underlying downgrades of 16% to FY24e adjusted EBITDA, reflects investor concerns about two of Tinexta’s most significant acquisitions in recent years, the CS division and ABF Groupe. An improvement in performance from either would be helpful for sentiment, which appears overly pessimistic.
Tinexta |
Weak Q324 but valuation appears too pessimistic |
Q324 results |
Professional services |
13 November 2024 |
Share price performance
Business description
Next events
Analysts
Tinexta is a research client of Edison Investment Research Limited |
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Tinexta’s weak Q324 results from its Cyber Security (CS) and Business Innovation (BI) divisions have prompted management to downgrade financial guidance for FY24 for the second time this year. We also take a more cautious stance on expected growth in FY25 and FY26. The c 60% decline in the share price in 2024, versus cumulative underlying downgrades of 16% to FY24e adjusted EBITDA, reflects investor concerns about two of Tinexta’s most significant acquisitions in recent years, the CS division and ABF Groupe. An improvement in performance from either would be helpful for sentiment, which appears overly pessimistic.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/22 |
357.2 |
73.6 |
1.06 |
0.51 |
7.3 |
6.6 |
12/23 |
395.8 |
78.0 |
1.03 |
0.46 |
7.5 |
6.0 |
12/24e |
468.9 |
81.2 |
1.01 |
0.12 |
7.7 |
1.5 |
12/25e |
513.8 |
94.5 |
1.19 |
0.26 |
6.5 |
3.3 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Two weak divisions
Tinexta reported underlying revenue growth of 4.5% y-o-y to €102.7m and adjusted EBITDA growth of 8.6% to €21.6m in Q324. While Digital Trust continued to generate good underlying growth (revenue +7.6% and adjusted EBITDA +14.8%), CS (revenue +0.4%, adjusted EBITDA +19.3%) and BI (revenue +4.6% and adjusted EBITDA -9.5%) were disappointing. Management believes general weakness in the market continues to affect sales of higher-margin products for CS. BI’s underlying growth reflects the previously flagged delays to new, subsidised finance programmes. This is compounded by the ongoing weak performance by ABF Groupe in France due to political changes and budgetary constraints.
Second downgrade to FY24 guidance
Following the downgrades to FY24 guidance at the time of the H124 results, mostly due to ABF Groupe, management has further reduced guidance to revenue growth of 14–16% (from 20%) and adjusted EBITDA growth of 10–12% (from 22%). This excludes the contribution from the recently acquired Defence Tech Holding (DTH). Including DTH, which adds 4% to revenue and adjusted EBITDA growth, management guides to growth of 18–20% for revenue and 14–16% for adjusted EBITDA. We incorporate DTH and move our FY24 forecasts towards the bottom end of management guidance. We also reduce our growth expectation for CS and BI in FY26 and FY27 to give downgrades for total EBITDA of 7–8% for FY24–26.
Valuation: Overly pessimistic
The change to estimates leads to a reduction in our discounted cash flow (DCF) based valuation to €22.5 per share (€27 previously). A reverse DCF using a weighted average cost of capital of 8% and terminal growth rate of 2% suggests the share price is discounting an overly pessimistic outlook: a revenue decline of 9% per year in FY26–33 with a flat EBITDA margin (26.7%) post FY26, which leads to EBITDA halving from FY26 to FY33.
Exhibit 1: Financial summary
€m |
2021 |
2022 |
2023 |
2024e |
2025e |
2026e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||
Revenue |
|
|
301.5 |
357.2 |
395.8 |
468.9 |
513.8 |
550.1 |
Operating costs |
(225.1) |
(262.4) |
(292.8) |
(351.5) |
(380.5) |
(403.5) |
||
Adj. EBITDA |
|
|
76.5 |
94.8 |
103.0 |
117.5 |
133.3 |
146.6 |
EBITDA |
|
|
71.3 |
86.3 |
93.8 |
105.0 |
124.3 |
137.6 |
Operating profit (before amort. and excepts.) |
|
|
61.1 |
77.6 |
79.6 |
90.4 |
104.7 |
|
Amortisation of acquired intangibles |
(11.0) |
(17.5) |
(17.9) |
(29.9) |
(28.4) |
(27.6) |
||
Exceptionals |
(2.6) |
(6.4) |
(5.0) |
(7.5) |
(4.5) |
(4.5) |
||
Share-based payments |
(2.6) |
(2.1) |
(4.2) |
(5.0) |
(4.5) |
(4.5) |
||
Reported operating profit |
45.0 |
51.6 |
52.4 |
48.0 |
67.3 |
80.6 |
||
Net Interest |
(3.1) |
(6.2) |
(1.6) |
(9.0) |
(10.0) |
(8.0) |
||
Joint ventures & associates (post tax) |
(0.2) |
(0.2) |
(0.2) |
(0.2) |
(0.2) |
(0.2) |
||
Exceptionals |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
||
Profit Before Tax (norm) |
|
|
57.5 |
73.6 |
78.0 |
81.2 |
94.5 |
109.0 |
Profit Before Tax (reported) |
|
|
41.7 |
45.1 |
50.6 |
38.8 |
57.1 |
72.4 |
Reported tax |
(13.0) |
(12.5) |
(16.4) |
(12.8) |
(18.8) |
(23.9) |
||
Profit After Tax (norm) |
40.3 |
52.2 |
54.5 |
54.4 |
63.3 |
73.0 |
||
Profit After Tax (reported) |
28.7 |
32.6 |
34.3 |
26.0 |
38.3 |
48.5 |
||
Minority interests |
(1.2) |
(2.4) |
(6.9) |
(7.9) |
(8.6) |
(9.5) |
||
Discontinued operations |
10.0 |
45.5 |
35.6 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
39.1 |
49.8 |
47.6 |
46.5 |
54.7 |
63.5 |
||
Net income (reported) |
37.5 |
75.7 |
63.0 |
18.1 |
29.6 |
39.0 |
||
Average Number of Shares Outstanding (m) |
47.2 |
46.8 |
46.4 |
46.3 |
46.0 |
45.8 |
||
EPS - normalised (c) |
|
|
84.7 |
108.5 |
104.6 |
102.6 |
121.2 |
141.6 |
EPS - normalised fully diluted (c) |
|
|
82.8 |
106.4 |
102.5 |
100.6 |
118.8 |
138.8 |
EPS - basic reported (€) |
|
|
0.81 |
1.65 |
1.38 |
0.40 |
0.66 |
0.87 |
Dividend (c) |
30.00 |
51.00 |
46.00 |
11.75 |
25.74 |
34.06 |
||
Revenue growth (%) |
12.1 |
18.4 |
10.8 |
18.5 |
9.6 |
7.1 |
||
EBITDA Margin before non-recurring costs (%) |
25.4 |
26.5 |
26.0 |
25.0 |
25.9 |
|||
Normalised Operating Margin |
20.3 |
21.7 |
20.1 |
19.3 |
20.4 |
21.3 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
602.9 |
574.0 |
654.7 |
867.1 |
852.7 |
842.1 |
Intangible Assets |
550.4 |
487.3 |
541.4 |
760.4 |
752.2 |
746.1 |
||
Tangible Assets |
25.2 |
48.4 |
51.2 |
44.7 |
38.4 |
33.9 |
||
Investments & other |
27.4 |
38.3 |
62.1 |
62.1 |
62.1 |
62.1 |
||
Current Assets |
|
|
213.2 |
403.5 |
364.4 |
226.2 |
260.6 |
294.1 |
Stocks |
1.3 |
1.9 |
2.1 |
2.1 |
2.1 |
2.1 |
||
Debtors |
119.5 |
129.5 |
148.3 |
176.0 |
192.8 |
206.5 |
||
Cash & cash equivalents |
68.3 |
115.3 |
161.7 |
(4.3) |
13.3 |
33.2 |
||
Other financial assets |
4.1 |
125.8 |
26.0 |
26.0 |
26.0 |
26.0 |
||
Other |
20.0 |
31.0 |
26.4 |
26.4 |
26.4 |
26.4 |
||
Current Liabilities |
|
|
(207.5) |
(260.9) |
(314.2) |
(328.6) |
(330.0) |
(331.2) |
Creditors |
(146.8) |
(156.4) |
(184.2) |
(203.6) |
(209.9) |
(216.2) |
||
Tax and social security |
(3.6) |
(2.9) |
(2.9) |
(2.9) |
(2.9) |
(2.9) |
||
Short term borrowings |
(54.1) |
(93.6) |
(121.3) |
(116.3) |
(111.3) |
(106.3) |
||
Other |
(3.1) |
(8.0) |
(5.8) |
(5.8) |
(5.8) |
(5.8) |
||
Long Term Liabilities |
|
|
(357.9) |
(314.6) |
(249.5) |
(317.5) |
(317.5) |
(317.5) |
Long term borrowings |
(281.5) |
(235.2) |
(172.9) |
(240.9) |
(240.9) |
(240.9) |
||
Other long term liabilities |
(35.0) |
(42.4) |
(36.0) |
(36.0) |
(36.0) |
(36.0) |
||
Net Assets |
|
|
250.8 |
402.0 |
455.4 |
447.2 |
465.8 |
487.5 |
Minority interests |
(46.9) |
(36.4) |
(45.7) |
(45.7) |
(45.7) |
(45.7) |
||
Shareholders' equity |
|
|
203.9 |
365.7 |
409.7 |
401.5 |
420.2 |
441.8 |
CASH FLOW |
||||||||
Operating Cash Flow |
|
|
72.5 |
72.8 |
75.1 |
71.4 |
80.3 |
89.7 |
Capex and intangibles |
(16.2) |
(24.1) |
(38.2) |
(28.0) |
(23.6) |
(25.4) |
||
Acquisitions/disposals |
(92.8) |
84.5 |
24.4 |
(224.2) |
0.0 |
0.0 |
||
Net interest |
(2.3) |
(2.4) |
0.3 |
(9.0) |
(10.0) |
(8.0) |
||
Equity financing |
(9.3) |
(8.1) |
(3.1) |
(10.0) |
(10.0) |
(10.0) |
||
Dividends |
(12.5) |
(20.8) |
(33.4) |
(29.2) |
(14.1) |
(21.4) |
||
Borrowings |
42.9 |
(40.2) |
(41.4) |
68.0 |
0.0 |
0.0 |
||
Other |
6.6 |
1.4 |
130.1 |
0.0 |
0.0 |
0.0 |
||
Net Cash Flow |
(24.6) |
48.6 |
44.7 |
(166.0) |
17.6 |
19.9 |
||
Opening net debt/(cash) |
|
|
91.9 |
264.4 |
77.6 |
102.0 |
331.0 |
308.5 |
Closing net debt/(cash) |
|
|
264.4 |
77.6 |
102.0 |
331.0 |
308.5 |
283.6 |
Source: Tinexta accounts, Edison Investment Research
|
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Research: TMT
Cordel has announced two new customer wins, with Aurizon Holdings, Australia’s largest freight operator, and Southeastern, one of the UK’s biggest rail operators. The company’s customer base has more than doubled since the start of 2024 and these deals indicate that Cordel is now seeing some network benefits from this expansion. We believe that Cordel is well placed to sustain its 40%+ growth rate, as its customer base increases and the company expands its use cases and revenues from existing customers.