Amino’s FY’17 results were well flagged at the December trading update, with revenue and profit in line and year end cash well ahead of previous expectations. Group revenue was flat at £75.3m however the expected mix change masked 27% constant currency growth in recurring software revenue. Adjusted EBITDA of £15.4m is c.5% ahead of expectations, reflecting strong gross margins and good supply chain management. This was offset by a higher amortisation charge, resulting in adjusted PBT in line with expectations at £11.2m (+10% y-o-y). FY’18 has started positively, with two new contract wins post the period end and a strong order backlog and pipeline. We continue to believe that the group’s evolving product portfolio is well aligned with industry trends and the increasing level of recurring revenue should drive a re-rating over time. With significant balance sheet strength to augment organic growth with earnings enhancing acquisitions, we retain our Buy recommendation and 243p target price.
