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.
Seeing Machines, the advanced computer vision technology company that designs AI powered operator monitoring systems to improve transport safety, has secured a new programme design win with a global US-headquartered automotive OEM to deliver the Group's Driver Monitoring System (DMS) technology. Seeing Machines is working alongside a major Tier 1 partner to deliver the new programme via its highly scalable FOVIO Chip, with mass production scheduled from late 2020, and an estimated lifetime revenue of A$6M for the initially planned car models. The design win is classified as a small value programme but is considered strategic with a significant potential for volume/model expansion with increasing demand for driver monitoring systems, globally.
Companies: Seeing Machines
We believe the positive trading update from one of CloudCall’s key USbased competitors, Ring Central, highlights the ongoing strength of the UCaaS market. RingCentral’s Q4 results and guidance beat analyst expectations, driven by mid-sized enterprise clients and supported by a buoyant market environment. We believe this augurs well for CALL. Enterprise engagement is a key area of focus during 2019 and the beat adds to our confidence over the 30% revenue CAGR we forecast on a midterm horizon. The shares trade on 2.2x FY19E EV/sales. Our PT implies material upside and we reiterate our Buy rating.
Companies: Cloudcall Group
Regular updates give us visibility into progress at HomeSend (HS) – the company’s 35.69%-owned JV with Mastercard. Today’s update excites with the first clear evidence of the changed focus as almost a third of the December flow now comes from account-to-account (A2A) transactions rather than remittances (i.e. banks and financial institutions instead of just MTOs). Although a key element of the eServGlobal investment, HS is private and at this stage commercial sensitivity limits information available. We assume that more information will become available as its scales. ESG’s management provides these updates to enable us to fine-tune our financial expectations for the JV and the group as a whole. This HS update follows on from one in late November and comes just ahead of the ESG’s FY 2018 results, due next week.
Roses are red – markets are blue! The rally since the start of the year resumed this week, after a pull-back last week. The FTSE 100 has risen due to the weakness of sterling and the impact on its dollar-earning constituents. More domestically-oriented indices have also risen but lagged more recently. The latest Brexit twist is due later with a statement to Parliament on the negotiations. Company news continue to dominate the morning headlines and amendment votes the evening ones. In Share News & Views we comment on DCC, EU Supply* FireAngel*, Location Sciences*, Northbridge* and NWF.
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GB Group (GBG) has acquired IDology, a US identity verification business, for an enterprise value of $300m/£231m. It has placed 39m shares at 410p per share to fund £160m of the purchase price, with the remainder coming from a new credit facility. We estimate that the deal offers significant cross-selling potential and will boost GBG’s international revenues to close to 50%.
Companies: GB Group
United Oil & Gas (UOG.L) an oil and gas exploration and development company brought to the Official List (Standard Segment) in July 2017 by way of a reverse takeover of Senterra Energy plc. No capital to be raised, expected market cap of £17m and expected 28 Feb Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m.
Companies: NMRP PGD KDR CER CLIN NBB MLVN RENX BAGR D4T4
The market has not faced quite so many conflicting challenges for a number of years, whether related to global geopolitics, trade wars, ongoing Eurozone issues or the “will they, won’t they” saga of Brexit. In our Best Ideas, we sought to highlight stocks that present investors with interesting opportunities following recent market moves. Those stocks, we believe, warrant investor attention, in many cases for uncorrelated or stockspecific reasons, regardless of the near-to-medium term market direction. These stocks, in general, represent attractive and well-managed businesses or assets, with share price catalysts and where valuations or recent stock performance provide investors with a good entry point.
Companies: 7DIG ABBY AMS ANX ARS ATYM AVON BLVN PIER CGS CAML CALL CSRT TIDE DTG DEMG ELM EMR FPO FST GTLY GENL GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KCT KGH LAM MACF MOD MKLW OXIG PCA PARK PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TWD TRAK TRI VNET VTC ZTF
In the first full six-month period since GDPR, DOTD has demonstrated that the Engagement Cloud platform continues to generate robust growth, through yet greater data integration and customer empowering insights. 33% headline growth from three strategic pillars included 15% organic revenue growth: pillar one, revenue from sales of additional functionality, grew 50%; pillar two, sales via strategic partners, grew 43% to constitute 41% of group revenue; and pillar three, international revenue, achieved growth of 40%. While Comapi suffered from UK retail exposure, the technology integration is well underway, leading to global opportunity from a fully omni-channel platform with broader functionality. With net cash of £16.7m at December 31st, the board has the benefit of balance sheet strength to consider all strategic opportunities. 12-month target 135p reiterated.
Companies: Dotdigital Group
We are introducing our Best Ideas for 2019 and also review the performance of last year’s picks. We suggest ten solidly financed stocks with good business dynamics that ought to be considered for core portfolio holdings and six UK domestically focused stocks that our analysts believe should perform strongly in the event that uncertainties unwind. We also introduce a new style of research from N+1 Singer which presents a Company’s dynamics and metrics in a clear and concise manner and concentrates on the pivotal issues affecting that Company and an investment decision.
Companies: BCA CLIN CLG CBP DNLM EAH FDL FCRM FUTR GTLY INS GLE NICL SDL SPR TRI
This Investment Research Paper addresses the issue of renewable power generation in the UK and in mainland Europe, which – after the deep-seated financial crisis of 2008/09 and the ensuing recession – now has better prospects of achieving critical mass. It also considers investment perspectives.
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Following full year results we take the opportunity to introduce FY’20 numbers into the market. We expect FY’20 revenue growth to accelerate to 11% (FY’19E: 6%), with 40% of top-line growth feeding down to EBITDA as a result of improved operational gearing. Within the revenue mix, FY’20E SaaS revenue growth accelerates to 11% (FY’19E: 7%) as the impact of customer retention projects and the new data reporting suite drive reduced attrition. We do not take into account potential partnership traction targeted by management as this is too early stage with untested distribution, although success using this model presents upside risk to our numbers. FY’20E EBITDA is expected to double y/y to £1.5m. Attraqt’s valuation at 1.8x FY’19 EV/Sales looks compelling versus peers (3.8x), with traction using connector/innovation partnerships or improvement in the retail sector backdrop presenting upside risk to forecasts.
Companies: Attraqt Group
FY’18 results report 10% like-for-like growth in revenues and EBITDA positive in-line with management expectations. The focus for 2018 has been on stabilising exit ACV by reducing attrition in the base, which has been successfully executed despite retail sector headwinds. CEO Luke McKeever has led a transition towards a data-led, consumer-centric strategy closely aligning with customer needs. We believe the strategy is working, with net revenue retention of 96% implying resilience in the customer base. Due to retail sector headwinds persisting into H1, we tweak our FY’19 revenue forecasts down by 4%. FY’19 EBITDA forecasts reduce to £0.7m from £1.3m, but we continue to expect a maiden bottom-line profit and cash-flow breakeven. On 1.8x FY’19 sales, valuation looks undemanding versus peers with similar revenue models (3.9x), and we see room for value creation at this level.
Companies: Attraqt Group
Rarely does quality come cheap, or that’s the accepted wisdom. The FTSE though is an ’irrational beast’, failing sometimes to recognise ‘deep value’ opportunities right under its nose. Take Blancco, the world’s #1 data erasure & mobile diagnostics software developer. The company is expanding rapidly, operates in a fabulous untapped niche, and generates almost all its revenues from repeat business, ongoing contracts and/or SaaS. In turn providing excellent forward visibility, positive cashflows and improving profit margins. The perfect triumvirate for long term investors.
Companies: Blancco Technology Group
Yourgene Health announced that it has reached an agreement with Thermo Fisher’s Life Technologies division (TF), whereby: i) TF will convert 41.4m warrants into a c.9% shareholding; (ii) proceeds of £3.8m to be assigned to reducing TF loans outstanding; (iii) TF will write-off the remaining £12.7m loans and accrued interest. Taken with warrant exercise, this reduces liabilities by c.£13.0m and leaves the business essentially debt free. TF will enter into a new commercial agreement obtaining a 3-year period of exclusivity for Yourgene’s NIPT products in Southeast Asia. We raise our target price to 18p to reflect the loan write-off, which implies FY 2020 EV/Sales of 6.9x falling to 5.4x in FY 2021 – justified in our view given the strong (3-year CAGR 35%) revenue momentum and clear progress towards profitability that the debt write-off enables.
Companies: Yourgene Health
Pelatro’s demonstration of its mViva marketing platform at a recent capital markets day revealed the scope of its big data analytics capabilities and interactive user interface. Ease of use by non-technical staff and the ability to quickly launch and analyse complex marketing initiatives are key differentiators. With its focus on client retention and revenue stimulation, which are now of vital importance to the stagnant telecom sector, its client base is growing fast. In 2018 it rose by eight to 14 clients including Telenor, Tele2 and SingTel. Pelatro trades at a significant discount to its peers on a 2018e EV/EBITDA of 9.2x.