Tinexta - Looking forward to recovery
Management believes the COVID-19 pandemic will have the greatest impact on Tinexta’s profitability in the current financial quarter, before an anticipated recovery later in FY20. There is a confident message on cost savings and ongoing efficiencies to help mitigate some of the expected decline in revenue. We downgrade our forecasts to reflect a slower recovery in Digital Trust and a lower margin in Credit Information & Management. The EV/EBITDA multiple for FY20e is 8.9x.
26 May 20
Tinexta - Strong FY19 with more challenging FY20 ahead
Tinexta performed well in FY19 and matched our forecasts, which were ahead of management’s guidance from the start of the year. Management has withdrawn guidance for FY20 given the economic uncertainty due to the outbreak of COVID-19. The portfolio includes a high proportion of resilient businesses but there will be some economic sensitivity in all business units, predominantly in Credit Information & Management and Innovation & Marketing Services. Our new assumptions factor in the Italian quarantine affecting the group in March and April 2020, with slow recovery thereafter, giving a downgrade to EBITDA for FY20 of c 6%. The EV/EBITDA multiple for FY20 of 7.7x is low versus the long-term average of 8.5x.
15 Apr 20
Tinexta - Compound growth outlook confirmed
Tinexta’s FY19 headline results are ahead of management guidance, with strong revenue growth in Digital Trust and Innovation & Marketing Services, and strong margin delivery in all business units. Guidance for FY20–22e highlights the continued strong underlying compound growth the group has historically produced. The shares trade at a 14% discount to our maintained DCF-based valuation of €14.6. EV/EBITDA in FY20e is 9.1x.
17 Feb 20
Tinexta - Encouraging signs for Q419
Tinexta’s Q319 results confirmed trends from earlier in the year: improving momentum for its largest business unit, Digital Trust, given structural growth drivers of digital security, and weak growth for its least important division, Credit Information & Management, due to macro sensitivity. Q3 is typically a seasonally less important quarter (23% of annual revenue in FY18) ahead of a more important Q4 (29% of annual revenue in FY18). Our forecasts for FY19 and FY20 are unchanged, as is our valuation. Our DCF-based valuation of €14.6/share offers c 25% upside from the current price.
19 Nov 19
Tinexta - Favourable thematic growth drivers
Tinexta provides IT solutions, information and consulting services in niche markets, predominantly to corporate clients. In its fastest growing divisions, Digital Trust and Innovation & Marketing Services, it is the domestic market leader and either expanding internationally or seeking opportunities. In aggregate, we believe the group is capable of c 6% organic revenue growth while expanding its EBITDA margin, cash flow conversion and ROIC. There is likely to be further M&A to increase geographic coverage, client reach or expand the product offer. We believe that management guidance for FY19 is conservative.
11 Nov 19
Tinexta - Confirmed strong outlook for Digital Trust
Tinexta’s interim results confirmed the outlook is positive for its two largest and most profitable divisions, Digital Trust and Innovation & Marketing Services. Overall revenue and profit growth for the group was slower in Q2 than in Q1, mainly due to one-off costs and a decline in Credit Information & Management. We maintain our PBT forecasts for FY19 and increase our FY20 forecast by 1%. Our DCF-based valuation increases to €14.6 per share (from €14.2), which offers 17% potential upside from the current share price.
14 Aug 19
Tinexta - Executive Interview
Tinexta founded in 2009 and has expanded quickly through a combination of organic growth and M&A. It is listed on the STAR segment of the Italian Stock Exchange and provides IT solutions, information and consulting services in niche markets predominantly to corporate clients. In this video director of corporate and financial communications, Lawrence Kay, provides an overview of Tinexta’s development, the business units and their competitive landscapes, historic growth rates and current financial guidance. Read our initiation note or latest research on Tinexta here.
17 Jul 19
Tinexta - Broad-based strong profit growth
Tinexta reported strong Q119 results, with c 10% organic revenue growth, c 32% organic EBITDA growth, 50% EPS growth and improving free cash flow (FCF) generation. All divisions contributed to profit growth and the acquisitions made in FY18 are performing well. Management has reiterated guidance for FY19, which appears conservative even though Q1 is a seasonally less important quarter. We maintain our forecasts for now but will review them later in the year.
21 May 19
Tinexta - Trust worthy
Tinexta provides IT solutions, information and consulting services in niche markets predominantly to corporate clients. It has leading positions in its domestic markets. In aggregate, we believe these are capable of 6% organic revenue growth through our forecast period while expanding EBITDA margin, cash flow conversion and ROIC. There is likely to be further M&A in order to increase geographic coverage, client reach or expand the product offer. Our multiples-based SOTP and DCF valuations support a valuation of €13.5–14.2.
16 Apr 19