Claranova’s Q1 revenue growth of 61% y-o-y was made up of 33% organic growth and 27% growth from the recent acquisitions in the Avanquest business. All divisions showed organic growth in the quarter, prompting an upgrade to our forecasts. We lift our normalised EPS forecast by 1.9% in FY19 and 1.4% in FY20.
Claranova reported revenue growth of 61% y-o-y for Q119, with 45% growth in PlanetArt, 101% in Avanquest (3% organic) and 49% in myDevices. Organic revenue growth for the group was 33%, up from 24% for FY18. The acquired businesses in Avanquest added 27% growth to reported revenues and saw organic growth of 24% for Q119.
We have revised our forecasts to reflect the stronger than expected growth in all divisions in Q1. This results in a 1.1% increase in FY19 and FY20 revenues. At the EBITDA level, this drives an increase of 1.2% in FY19 and 0.9% in FY20. We have also reflected the share buy-backs made in October. Overall, we increase our normalised EPS forecast by 1.9% in FY19 and 1.4% in FY20. We note that the recently announced reseller agreements in the myDevices business have not yet contributed to revenues; however, the scale of these distributors means that they could add materially to myDevices revenues in the longer term. Similarly, as the FreePrints service was only launched in India at the end of September, we do not expect a meaningful contribution to revenues in FY19 but could start to see a material contribution in FY20.
Reflecting the different business models and minority interests for each division, we use a sum-of-the-parts approach to valuation. Based purely on peer group averages per division, we calculate a fair value of €0.91 per share. Due to market weakness, this is lower than the €0.95 we calculated the last time we wrote, despite the upgrade to forecasts. However, once multiples are adjusted to reflect our views on the growth and profitability of each division, this increases to €1.11 per share. Milestones that could provide upside to our forecasts include: successful adoption of FreePrints in India; growth of the acquired Adaware business; and recently signed distributors reselling the myDevices platform in the US and China.