finnCap Research Company Notes - 27 March 2019

Mar 27, 2019 / News

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Sector: Technology & Telecoms

Pelatro (PTRO) : Corp

A year of profitable growth and expansion

Key data                              

  • Share price (p)                  92.0
  • Target price (p)                125.0
  • Market cap (£m)                              29.9
  • Enterprise value (£m)                    28.6

FY 2018 revenues and profits beat our high-growth forecasts: revenue and adj. PBT have been growing at a CAGR of 125% and 194% respectively since 2016. Moreover, H2 saw significant improvement on the weak cashflow in H1. This has been a transformational period. In August, the company acquired assets from Danateq to expand geographic reach and subscriber base covered. It also broadened the product suite with additional solutions complementing its original precision marketing software, building a multi-product marketing hub. Its mobile network operating customers have more than doubled from 6 to 16 now, with opportunities to up-sell and cross-sell across large multi-national telecoms groups, including Europe. The outlook is for continued profitable growth, supported by visibility on $5.2m of our $10.5m revenue forecast for FY 2019 and a further $15m in the pipeline. We reiterate our FY 2019 and issue FY 2020 forecasts.

Lorne Daniel


Sector: Technology & Telecoms

Amino Technologies (AMO) : Corp

First ODM partnership and contract

Key data                              

  • Share price (p)                  78.0
  • Target price (p)                185.0
  • Market cap (£m)                              56.8
  • Enterprise value (£m)                    41.4

Delivering a demonstrative proof point for the strategy announced in January regarding tier 1 opportunities, Amino has announced its first Original Design Manufacturer (ODM) partnership for devices for a top-tier pay-TV customer (we assume an existing customer). The partnership involves deployment of AminoOS within a third-party manufacturer’s devices. Amino benefits from a small amount of initial set up revenue – while the devices’ deployment then leads to recurring revenue, as the pay-TV operator benefits from the functionality and longevity enabled by the capabilities of the software. Deployed in the Asia-Pacific region from June 2019, the ODM agreement introduces a set top box powered by AminoOS, creating a manufacturer channel for further device deployments around the globe. The partnership and deployment excellently illustrate Amino’s evolutionary path, introducing consistently higher margin recurring revenue streams. Target 185p reiterated, with current free cash flow yield and dividend yields indicating a very strong opportunity.

Andrew Darley


Sector: Support Services

Cello Health (CLL) : Corp

Investing in new initiatives and enhancing services

Key data                              

  • Share price (p)                  124.0
  • Target price (p)                145.0
  • Market cap (£m)                              130.9
  • Enterprise value (£m)                    124.6

Cello reported a good set of FY 2018 results with net fees +2%, PBT +6%, EPS +14% (aided by lower tax), DPS +10% and net cash £6.3m up from £1.6m last year. 2017 acquisitions have continued to perform well and the Health division continues to broaden and deepen the client offering. Looking forward, the focus will remain on growing the group’s presence in the US and leveraging Signal’s digital capability into the healthcare sector. We reiterate our view that the market backdrop for Cello’s technically based, strategic advisory services is strong and defensive, supporting good growth prospects.

Guy Hewett


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