Esker's (PA:ALESK) FY17 results confirmed that the company has maintained its double-digit revenue growth rate. While investment in R&D and consulting capacity held back the rate of profit growth in FY17, this highlights the company’s focus on driving multi-year revenue growth. We have revised our forecasts to take account of the higher cost base, which is more than offset by the reduction in the group tax rate. We increase our normalised EPS forecast by 0.6% in FY18 and forecast EPS growth of 19.5% in FY19.
FY17 – revenue growth funds investment
Esker reported FY17 revenue growth of 15.3% (11% constant currency organic), with normalised operating profit growth of 6.2% (margin 13.9%). Investment in headcount was ahead of our forecast, with consulting seeing the largest increase due to the demands of new customers requiring implementation services. e-integration performed well in the year, generating 9% revenue growth and an 18% operating margin.
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