Catenae Innovation, formerly Milestone Group, is an AIM listed media and technology group which has recently completed a major restructuring under a new senior management team. The refocused strategy concentrates on the areas of media and fintech, delivered via a portfolio of synergous products, via subsidiaries and partnerships which take advantage of blockchain and distributed ledger technology.
In September last year Catenae commenced a major restructuring under interim CEO Tony Sanders. Along with the cessation of its previous social activities, several contracts in the fintech area deemed unable to deliver satisfactory results were also terminated. The new strategy concentrates on the areas of media and fintech, with the company set to launch a suite of products which use blockchain technology in the coming months.
In March 2018, Catenae signed a joint-venture agreement with a company majority owned by music and technology industry specialist Martin Heath. The JV, named Trust in Media, will produce payment processing and intellectual property solutions, initially within the media industry, using a combination of private and public blockchain technologies.
Catenae is also launching a range of virtual banking and KYC/AML products. Since the company’s review and subsequent cancellation of an agreement with Nasdaq listed Black Cactus Global, Catenae has identified alternative partners to ensure it can provide solutions in this area on a best of breed approach.
On a near term EV/EBITDA valuation basis we set an initial target price of 0.28p per share, in excess of X2 the current share price. Recent management stock conversions of accrued fees at a premium to the current stock price underpins further our confidence in prospects for the immediate term. We therefore initiate coverage with a stance of Conviction Buy.