While no company can ever be complacent enough ‘to announce victory’ we believe Netcall inspires a level of confidence to think several years ahead – way beyond its current £30m ACV, thanks to the business’ impressive and consistent growth (u/l Cloud ACV +28% y/y) which is being cleverly carved from a highly defined (but large) target market, whereby both existing and prospective customers still offer material growth potential. Indeed in conjunction with an accelerating product roadmap (empowering faster application development) and as well a proven go-to-market strategy (which should increasingly achieve networks effects and self-service) we foresee reducing capital intensity, alongside sustainable growth, such that margins should trend up over the long-term. We see very little of this currently priced in – with NET trading on a 5% FCF yield – versus well underpinned FY expectations.
