Profiting from the $400bn cybercrime wave
Regenersis provides a suite of product life cycle support services designed to help companies and their customers successfully deploy, protect, sustain, retire and re-use digital technology. Today's H1 results show the company on track to achieve our FY15 Headline Operating Profit (HOP) target of £15.8m, despite being buffeted by strong forex headwinds as the £ rose vs the €, Polish Zloty and Emerging Market currencies. Revenues were £101.9m (+2.2%) and HOP £6.0m (+30.4%) with negative currency movements of £10m and £0.7m respectively. Encouragingly, HOP margins still improved to 5.9% (vs 4.6%), and should exit FY15 at c.7%. Net funds closed December at a healthy £12.1m, reflecting improved cash conversion of 70% (vs 59%), and the interim dividend was hiked up by a healthy 25% to 1.65p. The stock trades on 10.6x EV/HOP, equivalent to a 18% discount, which appears too low in light of the high quality "Software & Advanced Solutions" asset base whose excellent fundamentals have not yet fed through into the financials. We think there is still significant potential for the shares to rerate, not only vs our 450p price target, but also on a relative basis compared to the sector.Regeneus is engaged in the development and commercialization of proprietary adipose-derived stem cell technologies used by physicians and veterinarians to treat musculoskeletal conditions in humans and animals.
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