Technology

Technology equity research

Explore the most viewed and latest equity research and media content for companies within the Technology sector. Stocks in this sector focus on IT Services, Web Development, Software Development, and IT hardware.

Technology equity research

Stocks in this sector focus on IT Services, Web Development, Software Development, and IT hardware.

13 May 19

FY18 ahead of expectations

CentralNic has delivered a solid set of FY18 results this morning that are 3.8% ahead of our forecasts and up 66% YoY at the adj. EBITDA level (excluding the one off domain name sales business discontinued in 2017). This has been a transformative year for the group following a number of acquisitions including KeyDrive which effectively doubled the size of the group and significantly improved earnings quality. Recurring revenues are now at 90% and cash conversion in 2018A approaching 100%, highlighting this quality. We leave trading assumptions unchanged for 2019E and 2020E but update our working capital assumptions to reflect the cash outperformance and negative working capital cycle in the business. We now expect net debt at the end of 2019E of £2.9m growing to £3.0m in 2020E. At the current share price, the group trades on a 2019E EV/EBITDA of 5.9x and a P/E of 11.7x with a FCF yield of 7.6% based on 2019E forecasts.

Companies: Centralnic Group

15 May 19

Strong H1 performance, underlying upgrade

Sanderson has delivered interim results in line with the 15 April update, with group revenue increasing 18% and adjusted operating profit up 34%. While there is still a note of caution in the outlook, good revenue visibility and healthy sales prospects underpin management’s confidence in further progress in H2. We have revisited our forecasts to reflect further improvement in underlying performance, the acquisition of Gould Hall and potential IFRS 15 impact. This results in unchanged earnings expectations in FY19 and 2% enhancement in FY20/FY21. A FY 2019 EV/EBITDA of 10.2x and P/E of 14.2x suggests further upside given positive underlying momentum.

Companies: Sanderson Group

11 Apr 19

Quarterly Research Outlook

We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.

Companies: ARS CYAN HYR LIT SOM ABBY AMS AMER ANX ATYM AVON BLVN PIER BUR CGS CAML CALL CSRT TIDE DTG DEMG EMR FPO FST GTLY GENL GOR GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO INDI JHD JOG KEYS KCT KGH LAM LOK MACF MNO MANO MOD MKLW OXIG PCA PANR PARK PGM PHC PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TRAK TRI VNET VTC ZOO ZTF

14 May 19

Well positioned for growth

Beeks Financial Cloud Group (“Beeks”) provides scalable, cloudbased ultra-low latency connectivity and infrastructure services for the automated trading of all key financial asset classes. Founded in 2010, in our view the business has a strong track record of growth and profitability and enjoys a solid financial position with high levels of recurring revenue and positive monthly cash generation. This has all been delivered while investing in the platform - the benefits of which have been demonstrated in the impressive revenue growth reported over recent periods. The experienced management team has positioned the Group well to benefit from the growth in its chosen markets.

Companies: Beeks Financial Cloud

14 May 19

Trading update confirms another strong year

Eckoh has released a positive trading update for the year to March’19. Trading was in line with expectations, with both the UK and US divisions delivering double digit growth in H2’19 following a strong first half for new business wins. Post the implementation of IFRS 15, we believe cash is the most important metric for the group. To that end we are highly encouraged by the strong cash generation in the period. Year end net cash of £8.3m is c.9% ahead of our £7.6m forecast, which was upgraded from £7.0m at the interim results, reflecting the contract win momentum throughout the year. With an “excellent” sales pipeline for the current year we expect continued strong performance from the group, confirming our belief that Eckoh represents one of the most exciting cybersecurity plays in the UK market.

Companies: Eckoh

08 May 19

Competitor results augur well for CloudCall

We reiterate our Buy rating on CloudCall as one of our key picks of 2019. Both RingCentral (RNG US) and Five9 (FIVN US) reported strong results in recent weeks, beating consensus expectations, with robust guidance. We believe major themes from reporting season so far (sustained 30% revenue growth, record orderbooks and strong client appetite) support our conviction on CloudCall. The shares have rallied 54% YTD, outperforming the AIM Technology Index and its peers, but still trades at a substantial discount to the peers’ average of 7.2x FY19E EV/sales. We see further go, underpinned by structural trends of enterprises seeking Efficiency, as per our Thematic Framework.

Companies: Cloudcall Group

10 May 19

Useful contract extension

StatPro has announced a useful extension to a contract with an existing customer – a total of €1.2m over three years from a Revolution Delta client. The news does not cause us to revisit our estimates, but provides a useful boost to forecast security, and demonstrates both client satisfaction and the positive tailwind of ongoing regulatory change. We look forward to hearing more around the time of the AGM later in May.

Companies: Statpro Group

16 Apr 19

Q1 2019 AIM Review

2019 started well for investors with U.S. stocks rallying on the back of trade talks between China and the U.S. resuming. Sterling rebounded in Q1 2019 as expectations built the UK would avoid a “no deal” Brexit, providing a further tailwind to more internationally focused UK companies. This sentiment spread across the globe and filtered its way down into small caps.

Companies: PRSM KMK SYS RAI MNO CCS MANO CBOX KGH

02 May 19

Let’s not forget the Big Screen

We note the substantial international success of Disney’s Avengers franchise (more broadly, Marvel) and highlight the positive readacross for the growth of the currently c. US$4bn localisation market. As themes of globalisation play out, we believe localisation market growth is likely to accelerate. Zoo Digital is very well positioned to exploit such trends, with long-standing relationships with a number of leading studios and streaming services alike, in our view. The shares have approximately halved year to date. We view the current level as a compelling entry point and reiterate our Buy rating.

Companies: Zoo Digital Group

02 May 19

Positive AGM statement highlights excellent start to year

Gresham has released an AGM statement indicating an “excellent” start to the year, with the two significant Clareti contracts that slipped from FY 2018 closing in Q1 and a further three new Clareti customers signed this year. Professional services contracts related to the former have also now been signed and are expected to generate initial revenues in excess of £500k. While this is a brief update, it confirms that underlying trading momentum remains robust and that the company is on track to meet our existing expectations. We make no changes to our forecasts and will provide a more detailed update when interim results are released in July.

Companies: Gresham Technologies

13 May 19

How to buy $1 bills for less than 25 cents

Tech firms are often faced with trade-offs. Take Amazon, who for years prioritised growth ahead of profitability in order to build dominant positions in online retail, cloud services and voice-search (re Alexa/Echo). Likewise, we think ClearStar is adopting a similar long term strategy to create shareholder value. Sure if it decided to switch off the ‘expansion button’ today, then earnings would immediately flow through. However, what we’re talking about here is a much bigger opportunity – disrupting an addressable market worth c. $4bn pa.

Companies: CLEARSTAR

19 Mar 19

Payments industry M&A thoughts

There have been a few developments with Mastercard this month. Having lost out to its rival, Visa, in the auction for Earthport, Mastercard has unexpectedly signed an agreement to purchase Transfast, another cross border account-to-account network. Like HomeSend (ESG’s JV with Mastercard), the Transfast network also supports the Mastercard Send service. HS has much wider reach across multiple markets and channels, already fully integrated with transactions flowing. However Mastercard seeks to address a huge global market and Transfast will add much needed capacity.

Companies: eServGlobal

15 Apr 19

H1 trading ahead of expectations

Sanderson has issued an update indicating that first half trading is ahead of management’s expectations with all group businesses performing well. Digital Retail continues to deliver double-digit growth, Manufacturing sales order intake has grown over 10%, and Supply Chain Logistics made a good start to the year. A positive outlook is supported by good sales order intake in the half, strong sales prospects for H2 and a healthy order book (c£8.0m). Despite this trading strength, we are adopting management’s cautious approach given underlying economic uncertainty and make no changes to our forecasts ahead of interim results on 15 May. We continue to believe that the current valuation (FY 2019 EV/EBITDA of 8.4x, falling to 7.5x for FY 2020) fails to reflect an attractive combination of strong trading momentum, good revenue visibility, healthy cash generation and a decent dividend yield.

Companies: Sanderson Group

18 Apr 19

FY 2019 ahead of expectations

The post YE trading update revealed that a strong Q4 performance meant that the company’s FY March 2019 revenue and earnings will be ahead of expectations and we raise our forecasts accordingly. We expect this strong demand for data solutions to continue and cautiously ease forward FY 2020 forecasts too. However, we note that IFRS 15 adoption saw £1.7m of revenue brought forward from FY 2018 (now restated) into FY 2019, skewing organic growth comparisons. Furthermore, EPS will also be skewed; not only by IFRS 15 adoption but also by an exceptionally low FY 2019 tax rate, due to relief on management options. Thus adj. FD EPS appears to fluctuate unpredictably when actually, underlying these headline numbers, the D4T4 business is steadily growing and maintaining margins while also increasing investment in the US operations. This is another year of excellent performance and we lift our TP to 300p in response.

Companies: D4T4 Solutions

02 May 19

Complementary bolt-on acquisition

Sanderson has announced the acquisition of Gould Hall Computer Services Limited, a provider of full enterprise solutions to customers in the supply chain and distribution sectors, for a maximum enterprise value of £3.17m. The consideration comprises an initial £0.48m in net cash together with the issue of 500,000 shares, and maximum deferred consideration of £2.15m. This looks a decent acquisition that will add complementary technology and broaden the customer list. It should also deliver healthy earnings enhancement in the first full year of contribution, although we will formally update our forecasts when interims are released on 15 May. Most importantly, this deal provides further validation of management’s ability to combine M&A with organic growth to deliver significant shareholder value.

Companies: Sanderson Group

29 Apr 19

Proactis (PHD) Interim results & strategy review April 2019

08 Apr 19

Executive interview - Claranova

27 Mar 19

Brave Bison Results Update

04 Apr 19

Mporium - Company Overview

30 Apr 19

Executive interview - WANdisco

29 Mar 19

Quixant (QXT) 2018 full year results presentation

01 Oct 18

Executive interview - WANdisco

20 Mar 19

Executive interview - EMIS

10 May 19

Proactis (PHD) H1 2019 results presentation

19 Mar 19

ECSC Group PLC (ECSC) Investor presentation, at ShareSoc March 13.3.19, by Ian Mann, CEO.

30 Oct 18

Proactis (PHD) Full year results Y/E 31st July 2018

06 Mar 19

GetBusy CEO, Daniel Rabie*

Premium

08 May 19

Attraqt (ATQT) Early Birds acquisition

26 Feb 19

Tekcapital - Full Year 2018 Preliminary Results

23 Apr 19

Tekcapital - Salarius launches production of MicroSalt® and secures first commercial order

Latest Content

The Sage Group

Strong subscription growth in line with expectations

In H1 18/19, organic revenue growth (+6.2%) was attributable to the continuing strong development of subscriptions (+27.7%) which more than offset lower maintenance and support revenue (-10%) and the decrease in SSRS revenue (-11.8%) due to lower licence revenue. The organic operating margin decreased by 1.6pt to 23.2% of revenue taking into account higher investment to accelerate growth and a higher bonus provision in line with the business development. Lastly, 2019 guidance is globally unchanged.

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17 May 19
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Osirium Technologies

Osirium Technologies - Moving beyond PAM

Osirium reported FY18 revenues and operating loss slightly ahead of our forecasts. Although bookings intake was lower than expected in H218, the increase in proofs of concept underway and the number of customers using PxM Express support accelerating bookings growth in FY19. By broadening the product offering with the recently launched secure IT process automation solution, Opus, and the soon to be launched endpoint privilege management (EPM) solution, Osirium is growing its addressable market and creating upsell opportunities for its ‘land and expand’ strategy.

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17 May 19
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Actual Experience

Embedded deployment capability creates significant revenue potential

Actual Experience has announced that its digital user software has been successfully evaluated in a testing programme by Vodafone, one of its existing Channel Partners. While there is no immediate financial impact, this evaluation confirms that AE’s software can be embedded in its partners’ core solutions and therefore has major implications in terms of reduced sales cycles and increased speed of deployment. This is a landmark development that, along with last week’s announcement heralding a growing number of maturing ‘land and expand’ opportunities, provides powerful evidence that the company has reached a transition point in terms of revenue scaling potential. Interim results are due out shortly.

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17 May 19
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SHED ACT SCHO ABM FFI PPIX AGM OSI CHH HUNT

Small Cap Feast

Essensys plc—a provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry, plans to join AIM. Offer TBC, expected 29 May 2019. Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019

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17 May 19
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eServGlobal Lidco Group

Morning Note – 16 May 2019

eServGlobal (ESG): Corp Further encouraging HomeSend progress in Q1 | LiDCO (LID): Corp Q1 trading update – above expectations

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16 May 19
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Indigovision Group

Positive start to FY19

Trading in the first four months of the year was in line with expectations. As in previous years, sales are expected to be H2 weighted and, whilst visibility of order timing is limited, management indicates that the current pipeline is supportive of the target to return the Company to profitability in FY19. We are encouraged by this positive start to the year and therefore leave our forecasts unchanged. We expect a significant improvement in financial performance this year, forecasting PBT of £2.0m vs. a £0.6m loss last year.

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16 May 19
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SAR MYSL SEE BLV LID IND ERGO DDDD AEO

Small Cap Feast

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16 May 19
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STMicroelectronics

More confident than ever

STM presented its CMD, the occasion for the company to share its strong confidence in its ability to fulfill all its guidance for 2019. As expected, this performance will be achieved thanks to good developments in Automotive, Industry, and new platform launches in Smartphone. The main surprise has been the ambitious mid-term targets which have been provided. STM is on its way to transforming a wobbly situation in 2015 to a much brighter financial performance.

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15 May 19
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Sanderson Group

Strong H1 performance, underlying upgrade

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15 May 19
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Sanderson Group

MORNING COMMENT

Hot on the heels on the Gould Hall acquisition announced earlier this month (2 May), Sanderson has released H1 results this morning which are ahead of management expectations. Revenue increased by 18% to £17.2m (roughly half organic and half reflecting the full period effect of the Anisa acquisition in 2017); with adjusted operating profit increasing by 34%. Note there is an IFRS15 effect at work here: although H1 benefitted to the tune of ~£260k at both the revenue and EBIT line, we expect the overall impact for the FY to be negative. So, we find ourselves in the situation of leaving current year numbers largely unchanged (except a very small EPS uptick and +£900k at the revenue line reflecting Gould Hall) which implies a small underlying upgrade.