finnCap Research Company Notes - 30 July 2018

Jul 30, 2018 / Research Notes

Read our regular corporate finance notes featuring updates from the finnCap Research team's sector experts.

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Sector: Technology and Telecoms

Nasstar (NASA): Positive trading update

Key data                              

  • Share price (p): 11.8
  • Target price (p): 15.0
  • Market cap (£m): 67.5
  • Enterprise value (£m): 66.5

Nasstar’s trading update for the interim six months to 30 June 2018 confirms performance in line with unchanged expectations. Visibility remains strong (last reported at 88% recurring revenue) with management confident in delivering in organic growth of 8% to achieve forecasts. The group remains cash flow positive for the year with net cash of £0.9m (FY18E: £2.1m; FY19E: £6.0m) even after VAT payments moved from in arrears to in advance, representing an estimated £0.7m one-off outflow. As the further benefits of the Nasstar 10-19 programme deliver further permanent efficiency improvements, the group has invested further in engineering resource to deliver the large contract (minimum £2.1m, up to £3.3m), over three years) announced in November. We reiterate our 15p target and look forward to interims on 24 September 2018.

Andrew Darley | adarley@finncap.com