Amino has this morning published a positive trading update, with figures for the year to November 2016 slightly ahead of our forecasts. We upgrade our 2016 estimates modestly, to reflect confirmation of this expected strength and upbeat comments on order backlog. Having recently upgraded our 2017 estimates, we choose to leave these unchanged for now, but will revisit them in February 2017 alongside full FY16 results.
Today’s update suggests that performance for FY16 was slightly ahead of our forecasts, which were set in October. The group has continued to benefit from the slew of contract wins in August, and the favourable exchange rate dynamics driven by Sterling’s fall.
We raise our 2016 revenue estimate from £72.2m to £74.8m, and our adjusted EBIT from £9.5m to £9.9m. Net cash at the year-end was strong at £6.2m, some £0.8m ahead of our previous expectations.
In addition to the strong trading performance for the year just ended, the update highlights a solid order backlog, with the positive impact on visibility for H1 FY17.
We choose at this time not to alter FY17 estimates (aside for a minor reduction in the tax charge) mainly on the basis that this announcement is effectively confirmation of previously-heralded strong performance. We upgraded 2017 revenue and profitability estimates in our note of 10 October 2016 (‘Positive trading update, forecasts increased`), an upgrade which covered both the strength of orders and the favourable forex movements - forex has actually been less positive in recent weeks.
Investors should take material comfort from the strength of the 2016 delivery; the performance is testament both to the strategic value of the Entone and Booxmedia deals, and to the quality of execution that has been achieved across the group. The business is clearly benefiting from both the broad product portfolio and the clear, IP-focussed strategy (as described at the recent Capital Markets Day, and in our accompanying note ‘Positioned for further success’). We look forward to additional detail at the time of full year results in February 2017, at which point we will be in a better position to consider alterations to the FY17 estimates.