Estimated 43% H1 sales growth drives FY17 upgrades
​Blancco is the world’s leading developer of ‘data erasure’ software, used to protect governments and corporates from ID/data theft and cyber-crime, along with being a pioneer in smartphone diagnostics (Xcaliber).
Cyber-crime is not only the scourge of corporates, consumers and governments alike, but also the bane of many politicians. The good news is that there’s help at hand from the likes of Blancco, who we estimate delivered a thumping 43% jump in H1’17 revenues (~25% LFL) to £14.2m (vs £9.9m), on the back of a buoyant data erasure market, better than expected diagnostics growth and forex tailwinds (weaker £).
Likewise, we predict H1 adjusted EBITA came in at a healthy £3.6m (up 28% vs £2.7m LY), despite a period of heavy sales, marketing and R&D investment, including the filing of two UK patents to further strengthen the group’s IPR and competitive ‘moat’.
On the balance sheet, we understand underlying cash generation was strong, albeit offset in H1 by the payment of prior period expenses and one-off M&A costs – thus leaving net debt of £6m as at 31st Dec ’16 (vs £1m net cash June ’16).
We have lifted our FY17 turnover and EBITA forecasts to £32.0m (+5.1%) and £8.1m (+8.0%) respectively, as well as bumping up our valuation to 275p/share (from 255p).
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