finnCap Research Company Notes - 18 March 2019

Mar 18, 2019 / News

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Sector: Technology & Telecoms

Maintel (MAI) : Corp

Prelims

Key data                              

  • Share price (p)                  500.0
  • Target price (p)                900.0
  • Market cap (£m)                              71.0
  • Enterprise value (£m)                    96.3

Maintel has delivered prelims in line with the positive trading update of January 28th, detailing EBITDA of £12.7m (£12.4mE) from revenue of £136.5m (£133.9mE). A challenging year included a 2H slowing of sales cycles and postponed client implementation plans, which have however since begun, underwriting FY19 expectations. With an increase in momentum in 4Q18, and some high-profile contract wins on the ICON platform for 2 NHS Trusts, representing the group’s largest cloud implementations yet, it is evident that prospects remain strong. The current valuation of a business with 70% recurring revenue, expanding EBITDA margins, and a return to strong cash conversion, delivers an FY19 free cash flow yield of an almighty 12.9% – our 80% target price upside to the share price is highly reasonable. With a 7.3% dividend yield for FY19 (FY20: 7.6%), we reiterate our 900p target price and look forward to continuing momentum in contract wins.

Andrew Darley adarley@finncap.com   

finnCap operates an ‘access-for-all’ approach for corporate research, approved by the FCA and paid for by finnCap’s corporate clients.

 

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