Blancco delivers 34% organic growth
​Blancco is the world's leading developer of 'data erasure' software, used to protect governments & corporates from ID/data theft and cyber-crime, along with being a pioneer in smartphone diagnostics (Xcaliber).
With the £ collapsing 12% and 9% respectively vs the $ and € in just 3 weeks, then those UK listed stocks generating the bulk of their profits abroad should benefit handsomely from the sharp currency devaluation. One such firm is Blancco, the world's leading developer of 'data erasure' software - who despite deriving almost 90% of its sales from outside the UK, has oddly seen its shares fall 6% since the EU Referendum.
What's more, this morning the group said that FY16 revenues had jumped 34% LFL (or 49% including the Tabernus and Xcaliber acquisitions), with both sales and profits being in line with market expectations. Not to mention another senior hire as Chief Revenue Officer.
Looking ahead, we expect similar levels of strong demand to continue, since we understand Blancco's addressable market is worth ~$2 billion pa for end-of-life devices alone. This is on top of the LEE opportunity, which could add $100ms more. Consequently, overall, we envisage turnover will climb from £22.1m last year to £59.3m by FY20 (see below) - representing a CAGR of 27.9% - along with putting the stock (at 190p) on modest PE and PEG ratios of 9.2x and 0.32x in 4 years' time.
On the numbers, we have held our previous projections intact, and reiterate the 225p/share Price Target. Furthermore, we do not think it is too far-fetched to speculate that takeover interest might be aroused at current price levels.
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