SLI Systems - Cost savings underpin PBT turnaround

SLI’s results reflect the business’s transitional status. Substantial savings were made to sales and marketing expenditure, which underpinned the company’s first year of profitability. We continue to forecast margin compression in the near term as the business begins its transition to an indirect sales model. Successful implementation of this shift remains the critical determinant of the business’s prospects.

- More routes to market

A recovery in growth remains stubbornly elusive, with falling revenues and rising losses in line with our forecasts. SLI Systems is treading water from a momentum perspective. However, operational metrics provide signs of encouragement, with ARR increasing slightly, and a substantial uptick in client retention rates. As of H218, SLI will employ a more indirect sales strategy, which could improve uptake of the solutions available. Double-digit revenue growth and 10% margins would imply 20% upside

Pathway to profitability

SLI Systems had a strong half in the six months to 31 December 2015, with annualised recurring revenue growing 23% (10% on a constant currency basis) to a record NZ$35.6m. Significantly, gross margin increased to 76.4% from 74.7% year-on-year (y-o-y), while the retention rate by value remained steady at 87%. SLI has mapped out a pathway to profitability, noting that it had been cash flow neutral in the first half and that its NZ$5.6m cash on hand was sufficient to bring the company to cash flow

New CRO, H116 revenues expected to rise 29%

SLI Systems has announced that it expects to report H116 revenues of NZ$17.3m, up 29% year-on-year, in line with our forecasts. The company also announced it has appointed Martin Onofrio as chief revenue officer (CRO), with immediate effect. Mr Onofrio brings 25 years’ sales and executive leadership experience. He was most recently chief revenue officer at Silicon Valley-based Attensity Corporation. His recruitment closely follows Silicon Valley-based CEO Chris Brennan's appointment last month.

SaaS e-commerce exposure at industrials pricing

SLI Systems is a fast-growing SaaS company operating in the hot field of e-commerce, but seemingly priced at EV/Sales multiples closer to those of mature industrials. It is currently in the investment phase and therefore pre-profit, but its revenue base is sustainable, high-margin and recurring, and should therefore generate substantial returns provided it can reach profitable scale. The company has recruited a new CEO, Silicon Valley executive Chris Brennan, who brings a consistent track record

Superfly

PROGRESSIVE: Beeks Financial Cloud Group - Head in the cloud, prospects in the stars

Finals sparkle, with an ‘in-line’/beat set of results (adj. EPS 6.4p vs our 5.1p estimate). Looking ahead, FY25 estimates are covered by recurring revenue, a strong pipeline and a new FY that is off to a flying start. To wit, ACMRR already ticked by £0.5m to £28.5m to 31 August – 74% of our FY25 revenue estimate. CEO Gordon McArthur telegraphs further progress: ‘Demand for our product is stronger than ever, fuelling a regular flow of new contract wins and extensions that offer long-term, recurri

Morning Note – 7 October 2024

Morning Note – 8 October 2024

1Spatial - Federal-level win in the US

1Spatial’s momentum in the US has continued, with the company securing a $1.4m deal with the United States Forest Service (USFS). This is a new Federal government-level deal for the business, building on the momentum 1Spatial has been reporting at state level, where it now has contracts or framework agreements with 21 states (up from 18 at the FY24 year-end).

Rosslyn Data Technologies - Capital raise – Visible profitability inflection poi

Rosslyn Data Technologies has announced a fundraising for a minimum of £2.5m via a conditional placing to raise £1.3m (gross) at 5p, the issue of £1.2m new 2024 Convertible Loan Notes (CLNs) and up to a further £0.25m via a retail offer at 5p. The funding will be used to deliver its growth strategy, enable the continued development of the technology platform and provide general working capital. Rosslyn recently announced a major new client win with one of the world’s 10 largest technology compan

Nanoco - Post strategic review – updated forecasts

Nanoco announced on 3 October 2024 that it had completed its strategic review following the earlier announcement (30 August) that its major European customer had ceased its development programme with Nanoco. The company has concluded that it will continue to focus on its other major customer, which is an Asian multinational supplying the electronics industry. Nanoco will also continue to pursue IP enforcement measures against third parties that are using the company’s technology, with potential

Buy the pullback

Rosslyn Data Technologies - Capital raise – Update to previous release

Rosslyn Data Technologies has announced a fundraising for a minimum of £3.1m via a conditional placing to raise £1.64m (gross) at 5p, the issue of £1.2m new 2024 Convertible Loan Notes (CLNs) and up to a further £0.25m via a retail offer at 5p. James Appleby, non-executive Chairman, will also subscribe for £0.264m via subscription shares at 5p after the release of the FY24 prelim results (post close). The funding will be used to deliver its growth strategy, enable the continued development of th

NET growth

23% cloud ACV growth and inorganic acceleration

We were expecting FY25 to be somewhat of a fallow period (as profit was due to be supressed by investment) but fast forward 9 months (and three acquisitions), the outlook has transformed as we’re now looking for +21% sales growth and +15% EBITDA. Furthermore we see strong returns continuing into FY26, as per maiden estimates, showing +19% EBITDA growth. We highlight that such returns are not ‘instead of’ organic growth (which continues to be very strong, as per FY24 results) but rather ‘in addit

Morning Note – 9 October 2024

Morning Note – 10 October 2024

Craneware Group | Microsoft Alliance to bring multiple benefits

Craneware has announced the formation of an extensive alliance with Microsoft Azure, its leading cloud partner, which will leverage Azure's capabilities, increase access for customers to Craneware's products, and improve Craneware's cost efficiency. Craneware's ability to partner with Microsoft in this way is a demonstration of the strength of Craneware's position in the US healthcare market for value cycle software, and furthers its ambition to become ubiquitous in US hospitals with enhanced pr

Telematics and fleet management: Microlise vs. Quartix Technologies

The UK AIM market has three quoted commercial vehicle tracking businesses: Microlise Group (SAAS), Quartix Technologies (QTX); and Trakm8 Holdings (TRAK). This note focusses on the larger two, Microlise and Quartix, initiating research coverage on each and comparing respective business models, strategy, growth opportunities and valuation. Whilst the businesses generally target different parts of the market, our conclusion is that Quartix offers better near-term value, cash returns and ROCE, whil