Well positioned for further strong growth
FY16 was a hectic year for SNP Schneider-Neureither & Partner (SNP), with three acquisitions successfully integrated, a €30m capital increase and a mammoth contract win announced in Q3 to combine the IT landscapes of two US chemical companies (we assume Dow Chemical and DuPont) that are merging. Preliminary figures show FY16 revenues growing by c 42% to c €80m (we forecast €77m) and adjusted operating profit rose by c 66% to c €7m, for a c 8.8% operating margin. We are reviewing our forecasts and would expect to edge FY17 revenues higher towards the middle of the guidance, with the operating margin maintained at c 12%. Given SNP’s strong market position in software-based transformation projects, and the sustained high level of activity, we believe the shares remain attractive on c 22x our existing cash-adjusted FY18e EPS forecast.SNP Schneider Neureither & Partner SE Formerly known as SNP Schneider-Neureither & Partner AG. SNP Schneider Neureither & Partner SE is a Germany-based company specialized in the Information Technology (IT) Services. The Company has two operational segments: Professional Services, which offers consultancy and training services and Software that provides sale of software and maintenance contracts. It offers software and software-related services for the transformation of IT systems, as well as the optimization of service and support processes. The transformation platform is based on the experience of the more than 1,500 projects. The Company's core products include SNP Business Landscape Management (BLM SNP), which structures the consultation process with standardized modules; SNP Dragoman that automates and simplifies the entire translation process; SNP Transformation Backbone that supports SAP System Transformation, as well as Business Landscape Transformation (BLT). The Company provides services to globally operating corporations in the fields of industry, finance and service.
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