finnCap Research Company Notes - 23 July 2019
Jul 23, 2019 / News
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Sector: Technology & Telecoms
dotDigital (DOTD) : Corp
FY trading update
Key data
- Share price (p) 97.7
- Target price (p) 135.0
- Market cap (£m) 290.5
- Enterprise value (£m) 271.2
The typically detailed trading update highlights underlying organic growth of 15%, within headline revenue growth of 19%. As revealed in May, the Comapi Dynmark and Donky low-margin pure SMS revenue streams are to be discontinued, following the completed integration of Comapi’s technology in May, with a consequent positive impact on cash flow – net cash of £19.3m exceeds expectations, despite investment in the three strategic pillars of product innovation, geographic expansion and development in the strategic partnership, as ARPU expands to £966 (FY18: £845; FY17: £715). EMEA delivered double-digit growth; the US delivered 27% growth from a targeted increase in investment, to 14% of group revenue (FY18: 12%); APAC grew 83% to $3.8m; and partner revenue grew (Microsoft Dynamics +10% to £3.9m; Magento from £9.3m to £11.8m). The success of each pillar continues to drive growth, and we look forward to prelims in October. Target 135p reiterated with numbers today repurposed for continuing operations.
Andrew Darley
020 7220 0547
Sector: Support Services
DX (DX) : Corp
Major milestone reached and cleared
Key data
- Share price (p) 13.0
- Target price (p) 18.0
- Market cap (£m) 74.5
- Enterprise value (£m) 75.8
DX has confirmed that FY 2019 results (to June) are expected to be in line with market forecasts, with the group moving back into profitability generating EBITDA of £3.2m vs. a loss of £4.9m last year. Sales were up 8% to £322.5m (our forecast £319.5m) and net debt £1.3m, significantly better than our forecast £9.0m. The improved cash flow is particularly encouraging, supported by new business wins on better terms. We make no changes to our P&L forecasts (cash flow will improve) and reiterate our view that the main issues DX faces are readily fixable by the new, highly experienced management team, and that there is therefore significant share price upside potential.
Guy Hewett
020 7220 0549
Sector: Technology & Telecoms
PCI Pal (PCIP) : Corp
Trading update highlights exceptional growth in FY 2019
Key data
- Share price (p) 33.5
- Target price (p) 50.0
- Market cap (£m) 14.3
- Enterprise value (£m) 12.8
The customer engagement specialist that secures and protects payment card data for companies handling payments by phone, has released a trading update for FY June 2019. We are reassured to hear the loss will be in line with our expectations and we are extremely impressed by the remarkable acceleration in the first year of the new AWS platform, both in terms of new customer contracts and the development of channel strategy, which accounted for 85% of the ACV on the new contracts. While the KPIs are extremely encouraging and point to the long-term success of the new platform, cash headroom is tight and being carefully monitored by management. Significant cash inflow is expected in Q1 and should give greater comfort by the time of the results in September. We reiterate our forecasts and 50p target price.
Lorne Daniel
020 7220 0545
Sector: Technology & Telecoms
Quixant (QXT) : Corp
H1 in line with expectations and on track for FY
Key data
- Share price (p) 261.0
- Target price (p) 530.0
- Market cap (£m) 173.2
- Enterprise value (£m) 165.4
Quixant’s trading update this morning confirms that the leading provider of computing solutions and monitors for the gaming industry is trading in line with expectations. As guided in March, the gaming market was slightly soft in H1, leading to a heavier than usual H2 weighting and prudent forecasts for FY 2019. Today, Quixant reassures investors that results are on track and the industry has begun to regain pace, leaving it confident of achieving full-year expectations. Opportunities in both the Gaming and Densitron divisions, coupled with a strengthening order book, place Quixant in a strong position to deliver in both the near and long term. We reiterate our target price (530p) and forecasts, and look forward to the interims in September.
Lorne Daniel
020 7220 0545
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