Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on IGE+XAO. We currently have 7 research reports from 1 professional analysts.
IGE + XAO had very strong revenue growth in Q1 17/18 (+14.7%). Announced on 8 November 2017, the take-over by Schneider Electric was launched on 14 December 2017. Schneider Electric is acquiring a software company which has been performing well and has strong growth potential in the coming years.
Today, 8 November 2017, IGE + XAO announced a friendly take-over by Schneider Electric. The price of the offer is €132/share including the attached dividend of €1.5/share with respect to FY2016/17. The proposed price includes a premium of 15% compared to the closing market price on 7 November 2017 (€114.8/share) and 41.5% compared to the volume-weighted average share price over twelve months. The tender offer is conditional to the holding of two-thirds of the shares (plus one share) of IGE + XAO at the closing of the offer due in February 2018. The IGE + XAO’s board of directors unanimously approved the proposed take-over by Schneider Electric and the CEO and CTO of IGE + XAO, respectively Alain di Crescenzo and Charles Baudron, the historical significant shareholder IRDI (Institut Régional de Développement Industriel) and Robert Grèzes will bring their shares to the offer, or a total of 26.78% of the capital of IGE + XAO. When the tender offer is closed, it is intended that Alain di Crescenzo and Charles Baudron will continue in their current functions at IGE + XAO which should be an independent company within Schneider Electric and will add additional responsabilities within the Group Schneider Electric.
In Q4 16/17, group revenue reached €8.1m (+7.8%). Strong revenue growth was driven by Asia, Europe and the large accounts. Prosyst, the 80%-owned subsidiary specialised in software for the design, simulation and diagnostics of industrial processes, contributed to the strong development of IGE+XAO. For FY2016/17, group revenue was €29.4m (+4.7%), above expectations (€29.2m, +3.8% estimated). R&D is an issue for the business development. IGE+XAO launched a new version of its SEE Calculation software, which complies with the latest electric standard NFC 15-500, and is planning the launches of new versions of its SEE Electrical Expert and SEE Electrical solutions before the end of 2017.
On 9 months 2016/17 (1 August 16 – 30 April 17), group revenue reached €21.4m (+3.6%), o/w €7.5m (+4.7%) in Q3 16/17 and €13.8m (+3%) in H1 16/17. IGE+XAO had higher revenue growth than expected in Q3 16/17, or +4.7% vs c.+3% estimated. Strong revenue growth was mainly attributable to significant activities in France, Northern Europe and Asia. R&D is an issue for the business development. IGE+XAO launched a new version of its SEE Calculation software which complies with the latest electric standard NFC 15-500 and plans the launches of new versions of its SEE Electrical Expert and SEE Electrical solutions before the end of the year.
IGE+XAO had a satisfactory set of figures in H1 16/17 which included revenue growth (+3%), a strong operating margin (26.6% of revenue) and a significant net cash situation. H1 16/17 (August 2016 – January 2017) figures: - Revenue reached €13.8m, +3%. Revenue growth was similar in Q1 and Q2 16/17 (+3%). The breakdown of revenue did not change significantly and was as follows: 38% in software (new licences and periodic licences), 46% in maintenance and SaaS, 16% in services. - The operating income was flat at €3.7m due to a lower research tax credit (-33% to €0.45m) which was included in other operating revenues. Therefore, the apparent operating margin decreased to 26.6% of revenue (-0.8pt). Excluding the research tax credit, the operating income increased by 7.4% and the operating margin rate was up 1pt. This improvement was due to operating expenses being kept under control (+1.7%). Staff costs and purchase/external expenses were the bulk of the operating costs (respectively 66% and 30% of the total). Staff costs increased moderately (+1.8%) while purchase/external expenses increased at a slightly higher pace than revenue (+3.2% vs +3%) due to higher marketing costs (three employees hired) and the non-recurring impact of the company’s 30-year anniversary which generated higher overhead costs. - Profit before tax was €3.9m (+1.4%). Excluding the research tax credit, profit before tax increased by 8.8% which corresponded to an improvement in the margin rate by 1.3pts. - Group net profit was down to €2.8m (-2.5%) after an increase in the income tax by 12% due to higher profit before tax restated from the research tax credit (+8.8%). The restated income tax rate was 31% (vs 30% in H1 15/16) considering that 2/3rds of the profit derives from France and 1/3rd from the international activities. On 31 January 2017, the group had a very solid financial situation with shareholders’ equity of €32m, practically no financial debt and cash & cash equivalents of €30m (vs €32m on 31 January 2016) despite the purchase of IGE+XAO shares for a total of €5.4m in November 2016.
IGE+XAO announced the creation of a commercial subsidiary in India (Bangalore) to sell Electrical CAD, PLM and simulation software to local key accounts and small/medium-sized companies and to deliver solutions to existing international accounts that have operations in India, mainly in the automotive, aerospace and railway sectors.
A small software editor with a wide product portfolio. IGE+XAO is a software provider of electrical CAD (Computer Aided Design), PLM (Product Lifecycle Management) and Simulation software. In 2015/16 (ended 31 July 2016), IGE+XAO had revenue of €28m (+3%) and had sold more than 86,400 licences (>40,000 users) in the world. IGE+XAO is a small international group with 19 commercial subsidiaries in 20 countries, 11 technology partners and 37 business partners in 32 countries. IGE+XAO has a small market capitalisation, c.€120m currently (EV/Sales 2017E: 2.9x, EV/EBITDA 2017E: 12.1x), substantially below Dassault Systèmes which is specialised in mechanical CAD/PLM software, €19.6bn (EV/Sales 2017E: 5.4x, EV/EBITDA 2017E: 16.5x). Electricity has been the most important source of energy for the manufacturing industry and electrical CAD solutions are essential to design and manage the electrical plans of their electrical installations and embedded electrical devices in vehicles. IGE+XAO is n°1 in France with a market share of around 70% (company’s source) and amongst the three main electrical CAD/PLM providers in Italy, Denmark, the Netherlands, Belgium and Poland. Conversely, the group is a small player in the German market. In electrical CAD/PLM software, IGE+XAO is the unique “pure player” with a product portfolio covering the whole of the electrical CAD market (industrial installations/machines, aircraft/automotive/trains/ships, building). IGE+XAO is benefiting from its strong positions in electrical design and data management. These are not areas for the launch of new products in the short term. Conversely, the group’s target is to improve its offerings in PLM, system design and the simulation/diagnosis and to develop communication tools with other existing software such as mechanical CAD, ERP, PDM software. Therefore, the medium-term target is to maintain R&D expenses at the current level of around 25% of revenue. More international in the future. Revenue growth (+5%/year on average in 2011-16) is based on organic growth and acquisitions. The latest operation took place in April 2014 with the purchase of 80% of the shares of Prosyst. IGE+XAO is mainly involved in Europe (90% of revenue in 2015/16 excluding the large accounts). Large industrial accounts (Airbus Group, Alstom, Embraer, Schneider Electric, Renault amongst others) which need complete and sophisticated software, maintenance and a large content of services represent a significant part of the group’s activities (30% of revenue in 2015/16). The target is to increase revenue in international markets through the creation of new commercial subsidiaries (India in 2017, Japan later), the development of sales networks and the signature of additional technical and commercial agreements with software editors, manufacturers of electrical equipment (such as those signed with Schneider Electric, Weidmüller) and services companies. The stock is an Add recommendation with an upside of c.16% (target price: €98/share) and is undervalued based on most metrics. There is growth potential in international markets and R&D should continue to sustain the development. The business model includes a high portion of recurring revenue, a high EBITDA margin and generates strong cash flows.
Research Tree provides access to ongoing research coverage, media content and regulatory news on IGE+XAO. We currently have 7 research reports from 1 professional analysts.
In addition to Hardman’s monthly analysis of client stocks, the thorny issue of market disruption – a popular theme currently - is also addressed. In a wide-ranging article, Hardman’s utilities analyst, Nigel Hawkins, assesses the impact that market disruption has already made. In some sectors, notably telecoms and aviation, market disruption has been apparent for many years, as the rise of Vodafone, Ryanair and easyJet demonstrates. However, in some sectors, such as oil and housebuilding, structural changes have been modest – the dominance of the big players endures. For investors, there is real interest in those sectors where changes are underway. The UK groceries market, which may shortly become a duopoly, is a case in point. And, intriguingly, who knows if there is a company currently languishing in AIM, which will attain a £50bn market valuation within the next decade?
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IQE has announced an immediate slowdown in shipments of VCSEL wafers, which materially affects FY18 revenues and profitability, and has issued revised guidance. Although we have cut our EPS estimates by 43% and 24% for FY18 and FY19 respectively, we note this is a short-term problem that does not impact the prospects for photonics growth in the medium term. Our revised estimates give an indicative value of 73p/share.
The June IPO of Knights Group Holdings, a Top-100 regional law firm, marked the fifth entrant to the burgeoning UK-listed legal sector. Following recent expansion of our coverage across all five listed legal firms, complemented by coverage of three broader support services peers with exposure to the sector, we revisit and build upon our views on this rapidly evolving sector.
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accesso has released full year results in line with the indications given in the 25 January trading update, which highlighted a small revenue beat and an adjusted EBITDA performance substantially ahead of expectations. Full year revenue increased 30% to $133.4m, delivering adjusted EBITDA up 29% to $24.6m – 8% ahead of our estimate. While the group result was ahead of expectations, we suspect that the positive impact of strong Ticketing volumes was offset by lower than expected Queuing revenues. Both acquisitions made positive contributions, with an impressive early performance from TE2 highlighting the attractions of its personalisation capabilities to multiple verticals. We need to review our forecasts and target price in detail, but anticipate putting through a 5-10% upgrade to our revenue and earnings estimates.
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During H118 IQE experienced double-digit sales growth on a constant currency basis in each of its three primary markets, although this was partly offset by a currency headwind. The investment in multiple VCSEL qualifications and the Newport foundry depressed margins, but underpins management’s expectations of a sustained photonics ramp-up in H218 and FY19. Acknowledging the currency headwind and one-off H118 photonics costs, we revise our estimates downwards.
AIM showed no signs of a summer slowdown with three strong months with regards to total funds raised (new and further issues). June, July and August averaged over £700m per month, boosted by a particularly strong June which delivered 14 IPOs (historically AIM has 5-6 new joiners per month). Through the end of August 2018, the total amount raised (new and further issues) of £4.80bn is +15% on the same period in 2017 which itself was the best year since 2007.
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This is an exciting period for Pelatro; the IPO in December has been followed by a landmark contract win in Central Asia and then an earnings-enhancing acquisition that brings recurring revenue, a foothold in Europe and additional products, all of which are transforming the offering from a single-product firm into a multi-channel marketing hub. Organic growth has been impressive with sales rising from $0.4m to $3.1m in two years and maintaining momentum in H1; EBITDA and adj. PBT both saw double-digit growth, to $1.5m and $1.2m, respectively. A key driver of this strong performance has been the $1.7m Tele2 contract win with licence and managed services, which effectively secured our pre-acquisition IPO forecast for the year. Slow cash generation is an unavoidable facet of the industry but a net cash position and a pipeline of opportunities underpin organic growth prospects, enhanced by the H2 acquisition of Danateq. We lift our TP from 100p to 115p.
Strong 1H19 y/y revenue growth of 17% (to $14.9m) should not be overshadowed by restrained gross margins in the period (33%) caused by mix effects and increased investment costs. The Group notes that 2H19E trading has begun ‘extremely positively’. We anticipate that margins will expand, estimating a FY2019E gross margin of 35%, as subtitling volumes recover, ZOOdubs moves to a more mature state and ZOO’s investment in capacity and technological enhancements allow it to capitalise on buoyant market dynamics which should exhibit its scalability. Aside from tweaks to depreciation and cash, our FY2019E estimates are little changed.
Companies: Zoo Digital Group
Edison Investment Research is terminating coverage on Location Sciences (LSAI). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant.
Companies: Location Sciences
IMImobile has agreed to acquire Impact Mobile Inc Canada’s leading provider of mobile engagement solutions from Dealnet Capital Corporation. The acquisition is very complimentary to both IMImobile’s product and its customer base, and is expected to be immediately earnings enhancing. We are upgrading our forecasts and our price target increases from 331p to 343p. We retain our Buy rating.
Beeks Financial Cloud announced final results for the year to June 2018 showing strong increases in revenue and profitability. Beeks enjoys high levels of subscription based revenues, with annualised committed monthly recurring revenue up 47% to £6.9m. We forecast 2019E revenue growth of 44% to £8m and 51% EBITDA growth to £2.9m. The business has now expanded into all major asset classes for automated trading, presenting wide-spread opportunities to expand the business further targeting more and larger institutional clients.
Companies: Beeks Financial Cloud
Vonage has announced that it is acquiring one of CloudCall's key competitors, NewVoiceMedia. This acquisition provides strongly favourable read-across valuation data. The CloudCall share price has now reached a level which is disconnected with anything approaching fair value. We are strong Buyers.
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Today R1 has announced a positive trading update and the continued restructuring of the business with CFO Ed Reginelli resigning and being replaced by Mark Zorko. This is consistent with continued execution of R1 financial plan focused on accelerating growth and profitability. We retain our Buy and 770p price target.
Alongside the CFO change announcement, RTHM included a compact update on trading. While H1 revenues are off plan (weak Performance market and integration disruption), lasting effects look likely to be modest and the biggest implication of H1 EBITDA guidance is that costs have been reduced much faster than expected, providing comfort for the full year. EBITDA looks set to continue to soar and investors are likely to focus on H1’19 EBITDA progress; c$20m compares very favourably with $3.1m in H1’18 and $14.0m for all of FY18. Our new FY19 forecast is for $48m. The stock trades on just 3.6x FY19 EV/EBITDA. We adjust our TP to 533p (was 730p) implying investors can more than double their money. BUY.
The strong momentum seen in Sopheon’s first half has continued through Q3, with the Group announcing that revenue visibility now exceeds $30 million for 2018 – up from U$27.2 million at the time of the interim results. This reflects a record Q3 performance with a number of transactions, including the addition of two new contracts of material size - one with a new customer and one an extension with an existing customer – which were booked towards the end of the third quarter. The update notes that the sales pipeline for the balance of the year remains ‘robust’. Unsurprisingly, the Board says that it sees the strong performance as indicative of the growing maturity both of the Enterprise Innovation Management solutions market and of Sopheon’s reputation and business model. New customer wins in the first half of 2018 were some 50% ahead of those achieved in the comparator period and momentum has clearly continued. We increase estimates for revenue and Adjusted EBITDA by 5% and 8% respectively for FY 2018E and also nudge up FY 2019E to reflect the updated revenue visibility in the trading update. After an impressive performance so far in 2018 and with Q4 typically a key contributor of revenue performance, we look forward to further positive updates.