Mensch & Maschine Software - Termination of coverage

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Mensch & Maschine Software - Long-term growth targets unveiled

Mensch und Maschine (M+M) saw business revert to pre-COVID trading patterns and a return to revenue growth in FY21. This translated to EPS growth of 13.1% and a dividend per share increase of 20%. The strategy of organic revenue growth combined with careful cost control supports management’s targets for a doubling in EPS over the next four to five years.

Mensch & Maschine Software - FY21 outlook confirmed

After returning to growth in Q221, Mensch und Maschine (M+M) reported 15.3% y-o-y revenue growth and 10.6% EBIT growth for Q321. Management maintains its outlook for FY21 revenue growth of 6–10% and EPS growth of 12–21% and expects to report a record performance for the year in both sales and earnings.

Mensch & Maschine Software - Group returns to growth in Q221

Mensch und Maschine (M+M) reported 4.4% y-o-y revenue growth for H121, driving 10.7% growth in operating profit and 10.0% growth in EPS. In Q221, the group returned to revenue growth (+23.1% y-o-y) after four quarters of mainly COVID-19-related weakness. Management maintained its outlook for FY21 EPS growth of 12–21% and introduced revenue guidance for growth of 6–10%, which implies H221 revenue growth of 8–16% y-o-y.

Mensch & Maschine Software - Growth in profits despite tough year

Mensch und Maschine (M+M) reported 12.5% growth in EPS despite a 0.8% decline in revenues in FY20. Reduced spend on travel and events combined with selective use of furlough benefits more than offset the decline in demand during Q2–Q4. The company expects its normal growth trajectory to resume from Q221 and has published its outlook for EPS and DPS growth in the short and medium term.

Mensch & Maschine Software - Focus on profitability pays off

Although COVID-19 continues to make signing new business challenging, Mensch und Maschine (M+M) has managed to report a small increase in revenue over the first nine months of FY20 (9M20). Combined with careful cost control, this has translated to a 20% increase in EBIT over the same period. While the FY20 EPS guidance range has been lowered slightly, the company is confident it can resume its growth trajectory in FY21.

Mensch & Maschine Software - Maintaining FY20 profit target

Mensch und Maschine has reported a respectable set of H120 results, with revenue growth of 8.5% and EPS growth of 19.0% y-o-y. Q2 suffered from weaker demand in both divisions due to COVID-19 disruption but good cost control minimised the impact at the net income level. Management is maintaining its EPS and dividend targets for FY20; we estimate that this could be achieved even if H2 revenues fall below H1.

Mensch & Maschine Software - Another strong year

Mensch und Maschine (M+M) reports strong revenue and earnings growth in 2019. Organic revenue growth of 25% was further boosted by the SOFiSTiK acquisition, driving EPS growth of 38% y-o-y and a dividend ahead of company guidance. Despite concerns over coronavirus, the company maintains its positive outlook for organic growth and profitability in FY20 and FY21.

Mensch & Maschine Software - VAR acceleration boosts profitability

Mensch und Maschine (M+M) reported 9M19 revenue growth of 30% year-on-year (23% organic) and EBIT growth of 40% (23% organic). The Software business revenue growth of 37% benefited from the first-time consolidation of SOFiSTiK in addition to organic growth of 12%. The VAR business has seen strong organic revenue growth year to date, resulting in EBIT margin expansion at a divisional and group level.

Mensch & Maschine Software - VAR acceleration boosts profitability

Mensch und Maschine (M+M) reported H119 revenue growth of 27% year-on-year, of which 20% was organic, and EPS growth of 27%. The Software business revenue growth of 34% benefited from the first-time consolidation of SOFiSTiK in addition to organic growth of 10%. The VAR business saw strong organic revenue growth in H1 resulting in EBIT margin expansion at a divisional and group level.

Mensch & Maschine Software - Proprietary software drives profit growth

Mensch und Maschine (M+M) reported strong revenue and profit growth in FY18. Its proprietary software business generated another year of growth and expanded operating margins above 23% for the first time. The VAR business saw a rebound in revenues (+17.5%) and, despite a lower gross margin, managed to grow its operating margin 1.6pp y-o-y. The recent increased investment in SOFiSTiK boosts the company’s construction software offering and adds high-margin proprietary software revenues.

Mensch & Maschine Software - Firing on all cylinders

Mensch und Maschine (M+M) has reported strong revenue growth for H118, with both divisions reporting double-digit growth on a year-on-year basis. Group EBITDA margins expanded over the same period, with better profitability for both businesses. Management has maintained its growth and profitability guidance for FY18, underpinned by the strong H118 results.

Mensch & Maschine Software - VAR business reaches inflection point

Mensch und Maschine’s FY17 results confirmed that its Software business continues to generate strong growth and margins. The VAR business managed to grow EBITDA despite the expected revenue decline, resulting in a record EBITDA margin for the group. With Autodesk back on a growth path after its transition to subscription licencing and the VAR business returning to growth in Q417, we see scope for profitability in the VAR business to improve further in FY18.

Mensch & Maschine Software - Proprietary software driving growth

Mensch und Maschine Software provides CAD/CAM software to the industrial and construction sectors to support the digitisation of their design, manufacture and build processes. The company has enjoyed strong growth over recent years, with revenues and EBITDA growing at CAGR 8.8% and 101% in 2012-2016. The ongoing transition to accommodate Autodesk’s shift to a subscription-based model is nearing completion, which should see VAR return to growth in FY18. This is coupled with continued strength in

Audioboom Group - Q1 24 revenue growth of +11%, FY24E forecasts reiterated

Audioboom’s FY23 results and Q1 trading update show Q1 24 revenue growth of +11% yoy, $6.7m of March 2024 revenue marking the platform’s highest revenue month since May 2022, and a confident outlook that leads us to reiterate our FY24E forecasts. Following the focus on new initiatives through FY23, the platform is now in its strongest ever operational position, with a record 1.1bn monthly ad impressions created in March 2024, record global audience reach of 38.6m unique global listeners in Janua

Alphawave Semi: FY23 trading update, amended forward guidance

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

Crimson Tide - FY23 reports +15% revenue; investment phase complete

Crimson Tide has reported FY23 results to December in line with expectations, with additional operating leverage benefitting updated FY24 and maiden FY25 and FY26 forecasts. FY23 delivered +15% revenue growth to £6.2m at 86% GM, of which over 90% is recurring, and maintained £5.8m ARR even after unexpected customer churn in the year as we previously noted. Crucially, the Group achieved milestone adj EBITDA profitability of £0.4m at 7% EBITDA margin, and edges closer to adj PBT profitability expe

Morning Note – 16 April 2024

Devolver Digital (DEVO LN) - Rebuild year

Devolver Digital encouragingly delivered 2023 results slightly ahead of expectations and provided a steady medium-term outlook that leads us to reiterate our 2024 Adjusted EBITDA estimates. Longer term, the company is now planning to further develop its two major planned titles, Human Fall Flat 2 and System Era's next major new release. We now expect those major titles to be released in 2026 rather than 2025, meaning we lower our 2025 Adjusted EBITDA forecast to $10.6m from $17.6m but introduce

Morning Note – 15 April 2024

Checkit - New product launch and contract wins

Checkit has won contracts with two customers worth at least £417k over the three-year lives of the contracts, confirming its ability to upsell to its existing customer base and supporting our forecasts. Having trialled the new technology with multiple customers, Checkit has launched its Asset Intelligence module, which uses advanced analytics and machine learning to enhance customer sustainability, reduce costs and increase revenue.

Soft growth patch

Auction Technology Group - H1/24 Trading update

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).

Morning Note – 17 April 2024

Touchstar - Full year results: Recurring revenue strategy delivers further profit growth

Touchstar is a supplier of mobile data computing solutions and managed services to a variety of industrial sectors. This morning's full year results reflect the outcome of a multi-year strategy coming to fruition for the group, with recurring revenue growth of 8.7% delivering overall revenue growth of 7.1% and in turn a 60% increase in PBT to £0.7m. Over the past few years, Touchstar has focused on enhancing the returns from their product offering through a shift towards recurring software licen

It’s not what you sell, it’s the way that you sell it

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.

LIBERUM: Cirata plc: Cirata from the flames

Intelligent Ultrasound Group - GE Healthcare launches new Voluson Signature with

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

Engage XR Holdings - Expanding from FY23, FY24E forecasts reiterated

ENGAGE XR’s FY23 results show revenue and net cash in line with the February trading update, EBITDA ahead at -€4.0m vs -€4.5m due to the split of cash outflow between opex and working capital, and a confident outlook that leads us to reiterate our FY24E forecasts. FY23 revenue for the core ENGAGE platform was unchanged vs FY22 at €3.3m, as H2 23 revenue was impacted by the record seven-figure contract announced in February shifting to 2024, and several enterprise customers scaling back renewals