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Significant growth in recurring revenues

All for One Group AG (formerly All for One Steeb AG; ISIN DE0005110001, Prime Standard, A1OS GY), which was renamed on March 22, 2019, grew revenue by 6% in the first half of FY 2018/19. A downturn in the volatile licence business (-15.7%) was more than offset by growth in Cloud Services & Support (+22%). This increased recurring revenue from 44% to 47% of total revenue. The company has confirmed its previous revenue and EBIT guidance, and a positive (one-off) tax effect in our model results in an increase in our EPS estimate for the current financial year. The expectation of a general economic slowdown in Germany, which is reflected, among other things, in a considerable reduction in the German government's growth forecast, does not currently seem to be having any impact All for One Group's operating business. Digitalisation, which is the principal growth driver, and the switch to SAP S/4 HANA should also ensure a good order situation in the medium term. In terms of fundamentals, shares in All for One Group are still cheap, with a 2019 EV/sales multiple of 0.6.

Our price target for the All for One Group share, equally based on DCF valuation and peer group analysis, is €72.30. We reiterate our “Buy” rating.