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Techstep’s Q3 sales were slightly disappointing although the gross- and EBITDA margins were intact, supporting our 2021 estimate. We continue to view Techstep as well positioned for growth and margin expansion, supported by ambitious targets from its recent CMD. We though recognize that the transition from hardware to more advisory and software in the earnings mix will take time. As such, we lower our target price to NOK 6 (7.1), but reiterate our Buy rating.
Companies: Techstep ASA
Arctic Securities
Acquisition of eConnectivity in Sweden Strengthening Techstep’s managed mobility services offering Small acquisition, ~NOK 11m in equity value (~1.4x Price/sales) Acquires eConnectivity and strengthens its MMS offering
Acquisition of eConnectivity in Sweden Strengthening Techstep’s managed mobility services offering Small acquisition, ~NOK 11m in equity value (~1.4x Price/sales) Supporting its strategy on becoming a leading MMS provider
The CMD focuses on growth in managed devices with own software Targeting >1m managed devices by 2025 vs ~200k currently Targeting an EBITDA/GP of >30% by 2025 vs our 2024 estimate of 30% Minor estimate changes expected
Revenues 15% below estimates, and EBITDA 8% below adj. for one-offs One-off at NOK 7m inflated reported EBITDA. EBITDA/GP margin intact. Annual recurring revenue of NOK 37.6m, 7% YoY, was 1% below ARCe Figures point to a slightly negative report compared to our estimate
We initiate coverage of Techstep with a BUY recommendation and NOK 7.1 target price. Techstep is well positioned to take advantage of the current demand trends and a growing market, supporting growth and further improvement of EBITDA margins. The recent acquisition of Optidev and growth in software sales will offset declining gross margins in hardware due to an improved sales mix and increased proportion of recurring revenues.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Techstep ASA. We currently have 0 research reports from 1 professional analysts.
This report is intended to help UK small- and mid-cap investors gain a better understanding of software companies’ routes to market, and to highlight how one of the most important facets of the way in which they grow and deliver value is routinely ignored. We examine sales processes for six UK-listed companies and one that has recently been taken over, and consider why they have followed their respective paths.
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Shore Capital
Alphawave Semi has reduced guidance for FY23 and prospectively citing lower revenues from China, changes in expected revenue recognition from long-term contracts, and continuing investment in R&D. The share price has reacted negatively, giving up most of the gains since the trading statement at the end of January. Current consensus, which is a good match for pre-existing guidance, should be reduced, most likely following release of the FY23 results and full 1Q24 trading update due on 23 April. H
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Capital Access Group
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Canaccord Genuity
Eleco’s FY23 trading update highlights record recurring revenue growth of +22% to £20.7m, strong profitability that leads us to expect FY23E adjusted EBITDA +3% ahead of our previous forecast, and a confident outlook that leads us to reiterate our FY24-26E EBITDA and EFCF. Across the group, excellent execution of the SaaS transition has driven recurring revenue to 74% of group revenue from 64% in FY22, and ARR is +24% yoy to £22.6m (£19.7m at H1), including c£2m of ARR from the successful acquis
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On 9 January last year, we set out our ten top stock picks for 2023, for what turned out to be another relatively poor twelve months for UK equities due to two wars, stubbornly high inflation and further tightening of monetary policy. This was even as other major markets, such as the US, largely recovered in the year. In the 2023 calendar year, the AIM All-Share index fell 8.2% and is still 42% off its 2021 high. From the release of our 2023 top picks note, the average total return (assuming div
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Zeus Capital
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A punchy 1H24 is especially impressive when compared with a very strong prior year. 1H24 EBITDA of £1.5m (21% EBITDA margin) was delivered from revenue of £7.0m, delivering EBITDA growth of 92% from rev growth of 15% (10% at constant currency). With no capitalised R&D, resulting free cashflow of £1.4m demonstrated impressive cash conversion, and an increase in net cash (no debt) to £9.7m, which provides assurance for the typically very large customers and partners. Given such strong performance,
Companies: Intercede Group plc
Maintel has reported a trading update for the year ending December 2023, indicating revenue in of at least £101m and adj EBITDA of “in excess of £9m”, compared with respective forecasts of £98m and £8.6m. Net debt of £18.1m also outperforms our expected year-end net debt of £18.6m. The group is continuing the trend established with the reintroduction of forecasts in April 2023, where growing confidence in delivery led to upgraded forecasts in both August and September, and still achieving outper
Companies: Maintel Holdings Plc
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ATG’s H1/24 trading statement indicates revenue for the six-month period to 31 March 2024 was $86m, a 6% increase on H1/23 (1% organic growth), helped by the addition of the EstateSales.Net (ESN) marketplace last year, which performed well in the period. Total marketplace revenue increased 2% (organic), driven by growth in value-added services (VAS) and event fees, offsetting a decline in commission revenue (mainly through lower asset prices).
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GE Healthcare has announced the launch of the Voluson Signature 20 and 18 ultrasound systems, with the related press release noting these systems ‘comprehensively integrate artificial intelligence’ to improve the ultrasound procedure for clinicians and the women being scanned. These ultrasound systems include SonoLyst, the AI which incorporates Intelligent Ultrasound’s ScanNav Assist and ScanNav AutoCapture AI software. The launch of additional Voluson systems including the SonoLyst suite of AI
Companies: Intelligent Ultrasound Group Plc
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