Hitting the straps
​eg solutions is a leading provider of software solutions which improve the efficiency of the corporate back office. It has sold over 100,000 licenses worldwide to major companies in industries including financial services, healthcare, telecoms and retail, as well as outsourcers and local government.
Results to end January 2016 confirm delivery against core strategic targets. A £3.1m equity issue in January 2015 funded investment in software, and in-house sales & marketing capabilities. That enabled eg to (a) launch significant enhancements to its product lines in September and (b) grow the order book across the year.
Minimal headline growth concealed a material improvement in recurring revenues, which adds to earnings visibility and quality.Recurring revenues grew 35% y-o-y while the order book of multi-year contracts currently stands at £17.4m, to be recognised over the next four years.
With costs under control and initial investment in product development broadly complete, that structure points to faster growth in adjusted profit and EPS.
Indeed, based upon the operational leverage inherent in a combination of higher recurring revenues and recent shift to higher margin products, underpinned by the certainty provided by the order book, we maintain our view of intrinsic value at c. 100p/share, nearly twice the current level.Â
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.