Double digit top line growth
​ServicePower provides complete end-to-end software for the scheduling and management of mobilised service professionals. This includes both employees and subcontractors within the repair, maintenance and installation sectors. After 18 months of heavy investment in its workforce management software, brands and processes, the firm is now starting to reap the rewards. Today's results for the 6 months ending June 2015 saw like-for-like sales growth of 12.8% to £6.94m. This was on the back of 11 contract wins with new/existing customers, continued product innovation (£0.8m spent on R&D, or 11.5% sales) and partner expansion. Encouragingly, 81.5% of H1 turnover was recurring with SaaS now deployed in 71% of customers. This means that H2 visibility is solid, indeed we believe that only about £0.5m of additional revenue (reflecting normal pipeline conversion) needs to be secured in order to meet our 2015 turnover and adjusted EBIT forecasts of £13.6m and -£0.3m, respectively. On a longer term view, ie by 2019, successful execution could mean turnover and operating profits of £19.4m and £2.9m, respectively (with margins at 15%). By which time the stock could potentially command multiples of > 11x EBIT and 2.5x sales. Thus generating a possible valuation range (including £8m of projected net cash) of £40m - £56m, equating to 16.7p - 23.5p per diluted share. We reiterate our price target of 11p/share for the next year. Ratings reinforce the scope for upside as the stock at 5p trades on an 2015 EV/sales multiple of 0.8x compared to the sector average of 2.8x
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