finnCap Research Company Notes - 1 May 2019
May 01, 2019 / News
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Sector: Technology & Telecoms
Tracsis (TRCS) : Corp
Acquisition
Key data
- Share price (p) 655.0
- Target price (p) 775.0
- Market cap (£m) 187.2
- Enterprise value (£m) 168.5
Appropriately coinciding with the appointment of Chris Barnes as CEO, allowing John McArthur to focus on M&A, Tracsis has announced the acquisition of Bellvedi Ltd, developer of timetable optimisation software called ATTUne. Having been partners in several significant software projects, particularly the most recent major contract wins involving TRACS Enterprise, the acquisition is highly complementary. As part of the Enterprise offering, ATTUne fulfils a critical element of the product suite, and simplifies rollout when part of the future group roadmap. The initial consideration of £4.0m (£3.7m cash) acquires a business generating £1.6m revenue and £0.7m adj PBT, with maximum £7.9m contingent consideration payable of after four years, based on very stretched profit metrics. The acquisition represents an alternative to internal development, acquiring software to enhance the attraction of TRACS Enterprise, and further relations with a familiar client base. Target price 775p reiterated, and we look forward to further newsflow from a strong pipeline of opportunity for organic and acquired growth.
Andrew Darley adarley@finncap.com
Sector: Industrials
Iofina (IOF) : Corp
More of the same please
Key data
- Share price (p) 16.5
- Target price (p) 34.0
- Market cap (£m) 21.0
- Enterprise value (£m) 36.9
Operational performance and profitability continue to improve at Iofina, helped by its latest plant expansion and a tail-wind of higher iodine prices, resulting in record results in 2018 and its first positive EBIT result. A laser focus on costs, further accretive expansions and a constant drive to improve operational efficiency should continue to pay dividends, driving further growth and profitability improvements. A continued improvement in iodine prices, which looks likely, will only serve to amplify these self-help measures.
Jonathan Wright jwright@finncap.com