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Raised revenue outlook for FY2017, with FY2017 underlying operating profit expectations still in line
19 Jan 17
EU Supply, the e-procurement software provider, has today announced further positive news flow, with a number of contract wins, adding to those gained in the second half of FY2016. We are therefore increasing our forecast for FY2017 revenues. Taking into account the net adverse effect of recent currency movements, the Company’s expectations for FY2017 underlying operating profitability are still in line with the market and consequently we leave our forecasts for FY2017 profits unchanged.
Successful Christmas trading leads to...........forecast upgrades
17 Jan 17
On the back of a very strong Q3 trading period, with revenues up by over 70% and volumes by 56%, the Board now anticipates that Distil’s FY17 results “will be ahead of current market expectations”. We are consequently raising our revenue forecasts for the next three years, which also see improvements to our bottom line PBT projections. Brand marketing spend growth of 88% in Q3 was running ahead of revenue growth, reflecting the ongoing brand investment across the product portfolio. This dilutes the impact of operational leverage, but still sees our previous PBT loss of c £120K educe by to thirds to £40K. A strong Q4 performance could potentially see Distil achieve breakeven, but we prefer to err on the side of prudence at this stage.
2016 outturn as expected; SEND on track
16 Jan 17
Instem has published a short trading update for the year to December 2016. The outcome was in line with (and in some areas slightly ahead of) our expectations. The year was impacted by the slowdown in early phase Clinical, and a number of contracts being delayed into 2017, but strong performance in particular came from the SEND submit product range. We make no changes to our 2017 forecasts which should benefit both from the signing of the delayed contracts, and the ongoing (and growing) boost from adoption of the SEND standard.
Short term trading pressure
10 Jan 17
K3 has this morning published a trading update; there has been weakness in December trading as customers continue to adopt subscription-driven Cloud-based models. This trend, combined with a number of contract slippages, has impacted H1, and management are not confident of making up the shortfall in H2. We downgrade our 2017E estimates by 18% at the Adj EBITDA level. We await further detail, both in terms of strategic progress and around the near-term pressures, with the H1 results due towards the end of March. Clearly this news is a disappointment, but it should not divert the group from its ongoing strategic refocus, which is already beginning to bear fruit.
Cloud migration gathers pace
09 Jan 17
StatPro has announced a five year contract with a global South African asset manager (an existing client) for a minimum value of around £1.5 million. This contract includes migration from StatPro Seven to the StatPro Revolution platform (which provides cloud-based analysis of portfolio performance, attribution, risk and compliance) in 2018. That will follow a proof of concept phase with the StatPro Revolution Performance module during 2017. This contract provides further evidence of existing clients’ willingness to retain and extend their relationships with StatPro as they migrate from their existing StatPro Seven solution to the Revolution platform. The announcement also suggests that the contract size is expanding from its previous level. This contract adds further support to our estimates for 2017 although we leave our numbers unchanged ahead of StatPro’s usual full year trading update which we expect to see towards the end of January.
Clinical slowdown offsets strength elsewhere
20 Dec 16
Instem recently confirmed that its Instem Clinical business continues to be impacted by a slowdown in the early-phase clinical market and, despite other areas of Instem performing well, that this shortfall will impact group financial performance for 2016. Management is addressing the challenging clinical market conditions, and continues to expect revenue growth and a return to profitability for the Clinical business unit in FY 2017E. The group has also announced a renegotiation of the earn out arrangements. We reduce FY 2016E forecasts, but leave FY 2017E unchanged.
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